adminJOHANNESBURG — The rand edged up for the first time to the dollar in five sessions yesterday as the recent sell-off in emerging market currencies abated ahead of the crucial European Central Bank (ECB) outcome in the afternoon. The domestic currency recovered to a session high of R10.6973/$ after sliding to lows of R10.8038/$, the weakest level in more than two months.
But the main focus of the day is the ECB, which is expected to further cut interest rates and possibly introduce additional steps to stave off deflation and improve the economy in the region.
“We believe that more accommodation from the ECB could cause the rand to fall victim to broad-based dollar strength, reinforce fears that one of South Africa’s largest trading partners is still fighting deflationary pressures and may also cause a rotation out of emerging-market bonds in favour of peripheral Europe, which would all be rand-negative developments,” Barclays analysts wrote in a note.
At 12pm, the rand was at R10.7042 to the dollar from Wednesday’s close of R10.7549.
Against the euro, the rand was at R14.5660 from its previous close of R14.6274 and at R17.9512 to the pound from Wednesday’s close of R17.9973.
The euro was at $1.3614 from its previous close of $1.3599. — Bdlive.
derick.khumalo