SA rand loses steam

Johannesburg. – The rand continued its decline against the greenback yesterday morning as the expectation that the US Federal Reserve will hike rates sooner than expected boosted the dollar. Upbeat non-farm payrolls data on Friday increased the expectation that the Fed could raise rates as soon as June. At 8.20am, the rand was trading at 12,3630 against the dollar from Tuesday’s close of 12,3477. Against the euro the rand was at 13,2135 from a previous close of 13,2216 and was at 18,6415 against the British pound from a previous close of 18,6121.

The euro was at $1,0692 from a previous close of $1,0706. Standard Bank analysts said the rand’s slide against the dollar accelerated on Tuesday and the rand had last traded at these levels in January 2002.

“Although particularly buffeted, the rand was once again not alone. Many other major emerging-market currencies are on the back foot, including the Turkish lira and the Brazilian real. The euro also remained under pressure as the European Central Bank implements its quantitative easing programme.”

The bank said it expected markets to remain largely risk-averse ahead of the Federal open market committee meeting next week.

“It may be too early to see a sustained improvement in the (local) currency just yet. That said, we would be careful not to buy dollars here. The rand could go either way. Markets are thin and liquidity little,” Standard Bank said. – BDlive.