File photo: Nadine Hutton.
File photo: Nadine Hutton.

Rand surrenders some gains

By Reuters Time of article published Apr 9, 2015

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Johannesburg - South Africa's rand gave away some of its recent gains on Thursday as the US dollar strengthened on interest rate hike expectations, however analysts believe the local unit could strengthen later this week.

At 06h37 GMT the rand was trading 0.27 percent softer at 11.8400 to the dollar compared with its closing level on Wednesday.

The local unit touched a month-high of 11.6950 on Monday after weak US jobs numbers weighed on the dollar.

“The environment remains moderately rand helpful, although dollar gains following the Fed minutes are constraining USD/ZAR downside,” Rand Merchant Bank currency trader John Cairns said in a market note.

Technicals suggested their was room for further rand strength. The local unit has traded above the 14-day moving average for most of this year but has dipped below the technical indicator level this weak.

US Federal Reserve officials acknowledged risks from overseas and a weak start to the year at their March meeting, according to minutes released on Wednesday.

But they remained confident enough in the strength of the recovery to continue laying the groundwork for an interest rate hike later this year.

The dollar index, which tracks the greenback against a basket of six major counterparts, rose 0.3 percent to 98.224.

In fixed income, the yield for the 2026 benchmark was down 1.5 basis points to 7.615 percent.

Reuters

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