The rand was firmer at midday on Thursday‚ as the local currency continues to strengthen on positive sentiment following the resignation of Jacob Zuma as head of state.
ANC president Cyril Ramaphosa is due to be sworn in as state president later on Thursday‚ which would open the way for him to deliver the State of the Nation address on Friday.
The rand gained more than 2.5% against the dollar on Wednesday in a firmer dollar environment‚ as Zuma announced his long-awaited departure.
FXTM analyst Jameel Ahmad said Zuma’s resignation ended the persistent political risk element that has clouded SA for a long time.
“This should provide an opportunity for the rand to continue moving towards levels not seen since the days of the Federal Reserve signaling to the market that it was preparing to raise US interest rates‚” he said.
At 11:30am the rand was at R11.6427 to the dollar from R11.717‚ at R14.5414 to the euro from R14.587 and at R16.357 to the pound from R16.4001.
The euro was at $1.249 from $1.245.
The rand was also supported by a turnaround in the euro‚ following the release of upbeat GDP numbers for the eurozone earlier.
The dollar initially found some support on higher-than-expected inflation data on Wednesday‚ as it could lead to a more hawkish stand by the US Federal Reserve. It weakened in late trade.
While inflation pressures have been intensifying‚ investors said they were not extreme‚ Dow Jones Newswires reported.
“I don’t think we’re all of a sudden in a different world‚” said Ilya Gofshteyn‚ a macro strategist at Standard Chartered Bank. While the inflation data could bolster the currency by fostering the perception the Fed will face pressure to speed up its pace of interest-rate increases‚ “the US deficit is looking pretty nasty and is pulling in the other direction against the dollar”‚ he said.
by Maarten Mittner – BusinessLIVE