The rand was bid 6c firmer than Tuesday’s same time bid at R14.30 a dollar. Photo: Bloomberg
CAPE TOWN - The rand was somewhat surefooted yesterday after US President Donald Trump’s potshot at Federal Reserve chairperson Jerome Powell over interest rates weighed on the dollar, allowing the domestic currency to trade in a range of between R14.26 and R14.46.

Meanwhile the inflation figures had little impact on the rand with the consumer price index (CPI) 5.1percent year-on-year in July 2018 from 4.6percent in June, the 16th consecutive month below the SA Reserve Bank’s upper-target level of 6percent but somewhat higher than market expectations of 5percent.

Corporate treasury manager at Peregrine Treasury Solutions, Bianca Botes, said earlier that higher-than-expected CPI figures would surely put pressure on the rand and interest rate hikes would become a reality.

“While inflation is expected to have bottomed and an approach towards the upper band of the inflation target range is expected, the weak rand is likely to accelerate this move which will see already strained consumers come under further pressure,” said Botes.

At 5pm, the rand bid 6c firmer than Tuesday’s same time bid at R14.30 to the dollar. Against the pound, the rand was 2c stronger at R18.45 and to the euro, the currency eased 4c to R16.58.

NKC analyst Elize Kruger said the CPI release surprised slightly on the upside, mostly reflecting higher administered prices and further fuel price increases.

“Given the rand exchange rate’s renewed depreciation in the past week, the risk of higher import price pass-through has also increased. However, the pass-through of rand depreciation has proved to be limited in past periods of depreciation when local demand is dismal, as retailers then typically have limited pricing power.”

JSE stocks were on positive ground with the blue chip Top40 index gaining 1.83percent to 52061.61 points, while the broader all share index inched up 1.64percent to 58125.95 points.

Leading gainers among major movers were Northam Platinum, which increased 6.61percent to R36.30, Exxaro, up 6.21percent to R156.39 and Aspen Pharmacre, which rose 5.95percent to R282.88..

The biggest loser was Quilter, which plunged 6.83percent to end the session at R25.90. - Business Report Online.

- BUSINESS REPORT