THE rand held at stronger levels on Tuesday morning‚ but remained within its recent trading range.
The local currency drew its strength from a positive global sentiment‚ with US equities advancing to a record high on Monday.
But a recovery in the dollar appeared to put a cap on further gains in the rand after early indications that Hurricane Irma was less damaging than previously feared.
“Global markets are reflecting both risk-on and a stronger dollar‚ an unusual combination‚” Rand Merchant Bank currency strategist John Cairns said in a note.
With geopolitics appearing to be on the back burner‚ potential catalysts could come from the release of US retail sales and inflation figures for August later in the week.
The data could affect the dollar and‚ in turn‚ the rand. But the recent price action suggests that markets expect the Federal Reserve to pause in its rate-hiking cycle.
Foreigners were net buyers of local bonds to tune of R4-billion over the past week‚ according to JSE data‚ suggesting markets still expect central banks in the developed markets to remain accommodative.
At 9.40am‚ the rand was at R12.8786 to the dollar from R12.9803‚ at R15.4182 to the euro from R15.5131‚ and at R17.0049 to the pound from R17.0874
The euro was at $1.1974 from $1.1952.
by Andries Mahlangu -BusinessLIVE