adminThe rand recovered in early trade last Wednesday, with the dollar weakening as the global panic weighing on markets at the start of the week eased slightly, but investors awaited clues on policy outlook from the US Federal Reserve chair.
The rand managed to claw back some lost ground on the back of a weaker dollar as worries over slowing global growth after the recent falls in oil and growing concerns about the health of European banks and China receded slightly.
The green-back hovered near a three-and-a-half-month low set on Tuesday.
“Global sentiment is improving. Risk currencies have reflected the better mood, recovering slightly, with the rand also catching up its recent under-performance,” Rand Merchant Bank currency strategist John Cairns said in a note.
At 08:45 the rand was 0,44% stronger at R16 0000/$, compared with its New York close on Tuesday.
Talks between President Jacob Zuma, Finance minister Pravin Gordhan and business leaders on Tuesday about the economy and the need to avoid a rating downgrade are shaping sentiment locally as the government tries to restore confidence in the battered economy.
Although this has not yet fed through strongly into the markets, Cairns said investors are now waiting to see if the government will really act on the proposals made by business leaders.
“The issue remains whether the government will walk the walk now that they have talked the talk.
“Having built up expectations, Zuma needs to keep the sentiment building in tomorrow’s State of the Nation Address,” said Cairns. — Fin24.
Online Reporter