JOHANNESBURG - The rand firmed as bets of interest rate normalisation on US soil receded to boost risk appetite, according to NKC Research.
High-frequency indicators of global activity continue to suggest accelerating global growth, which should give investors the confidence to maintain a risk-positive asset allocation.
“We are likely to see a meaningful decline in the greenback out to Q4, which will oil the wheels of world trade and capital flows to EM,” NKC Research said.
The rationale has been a the same all along – periods of world trade expansion have tended to help growth outside the US catch up with that in the US. And world trade expansion has been aided by China’s credit cycle, the impulse of which is unlikely to begin fading until Q4 this year.
At the close of local trade, the rand quoted 0.35 percent stronger, at R13.98/$, after trading in range of R13.97/$ to R14.08/$. The rand traded little changed overnight. The expected range of the rand against the dollar today is R13.90/$ to R14.15/$.
Brent crude oil
The Brent oil price rose to the psychological $70 level yesterday, but paired gains soon afterwards amid spreading coronavirus cases in Asia. At the close of local trade, benchmark Brent crude futures quoted 0.65 percent weaker, at $69.28pb. Crude prices softened during Asian trade this morning.
BUSINESS REPORT ONLINE