Cape Town – The rand, which traded on the front foot against a weaker dollar on Tuesday, has started the year off around 10% better than where it started 2017.
By 10:37 the local unit was trading 0.64% firmer at R12.29/$.
In the absence of data releases, currency watchers are expecting the rand to be range bound, with Adam Phillips of Umkhulu Consulting seeing the local currency trading between 12.23 to 12.38 against the greenback.
“Unless some major importer comes in, the ZAR is going to continue at levels that certainly don’t inspire exporters to sell,” said Phillips.
He added that offshore operators and investors were seemingly badly caught out by the announcement of Cyril Ramaphosa’s election as ANC president.
“The moves we have seen were very similar to 2001. With gold managing to move back above $1 300 and the EUR above 1.20, this could mean the ZAR could move back below 12.30. I might add that it has already had a hefty correction and I have to ask myself how much Zuma discount is in the ZAR? That might be a further 50 cents,” said Phillips.
TreasuryOne dealer Wichard Cilliers expects to see some liquidity filtering back into the market as some people return to work.
AFP reported on Tuesday that the dollar suffered further selling amid profit-taking after the passage of the much-anticipated US tax cuts, as well as expected monetary tightening by other central banks that will align them with the Federal Reserve.
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