Rand flirts with R12/$ as weak dollar provides support

The rand was relatively stronger on Wednesday morning‚ launching another attempt to break through the R12/$ barrier.

The impetus this time came from the overseas markets‚ where the dollar hovered at fresh three-year lows against the basket of currencies.

The dollar weakness since the start of the year has caught some off guard‚ coming in the face of upbeat indicators that back the case for more interest rate increases.

Global equity markets showed continued upward momentum‚ helping the rand‚ which has been one of the best performing currencies‚ at least since December.

Standard Bank trader Warrick Butler said in an e-mailed note on Tuesday that the rand moves since December — when Cyril Ramaphosa was elected as the new leader of the ANC — were overextended.

“There has been so much priced into the rand since Ramaphosa’s victory that the potential for increasingly swift moves are probably highly unlikely. If anything‚ further strengthening should be more of a grind.”

At 9.39am‚ the rand was at R12.0259 to the dollar from R12.0333‚ at R14.8104 to the euro from R14.7987 and at R16.8756 to the pound from R16.8456.

The euro was at $1.2315 from $1.2298.