The rand was slightly firmer across the board in early Tuesday trade as market players looked to the outcomes of the Reserve Bank’s Monetary Policy Committee meeting for some direction.
The MPC meeting gets underway today and the announcement on interest rates is due shortly after 3pm on Thursday.
The repo rate is expected to remain unchanged at 5.0% according to a survey of eleven leading economists by I-Net Bridge.
At 8.50am‚ the rand was bid at R8.8237 to the US dollar from R8.8559 at Monday’s close. The local currency was bid at R11.7842 to the euro from its previous close of R11.7830 and at R13.9892 against sterling from R14.0153 before.
The euro was bid at $1.3355 from Monday’s close of $1.3309.
Absa Capital analysts said in a note the US dollar was weak across the board on Monday‚ which suggests that the improvement in the rand was also partly a function of a weak US dollar environment.
“Hence‚ so long as the domestic labour situation remains tense‚ we would continue to favour selling into rand strength in the near term. That said‚ not only is the 9.00/USD-handle psychological‚ but this level has held on repeated occasions in recent months‚ and at that level our sense is that a lot of bad news is priced into the rand. We expect rand participants to largely mark time ahead of Thursday’s MPC meeting and still believe that if the policy statement proves to be overly dovish that the rand could be vulnerable to push up to the 9.00/USD level.” - I-Net Bridge