The rand was softer against major global currencies shortly before noon on Tuesday‚ with caution on global markets ahead of risk events later in the week.
The recent profit taking on global equity markets‚ and rand weakness mainly reflected that markets had been “running too hot recently” and that many were happy to lock in the profits‚ Rand Merchant Bank currency strategist John Cairns said.
Foreigners had been net sellers of local bonds since early last week‚ Cairns said.
Focus remains on the forthcoming US Federal Reserve monetary policy committee meeting‚ which concludes on Thursday.
US President Donald Trump’s state of the union address‚ at 4am South African time on Wednesday‚ is also being closely watched. The speech‚ which could speak to future infrastructure plans‚ and thus US debt levels‚ could generate currency volatility‚ analysts said.
Local data earlier was positive. The Reserve Bank reported that private-sector credit extension grew 6.72% to R3.5-trillion in December‚ an acceleration from November’s 6.48% annual growth.
A Trading Economics consensus poll had expected credit extension to slow to about 6%.
At 11.30am‚ the rand was at R11.9644 to the dollar from R11.9401‚ at R14.8143 to the euro from R14.7832 and at
R16.7805 to the pound from R16.8050 The euro was unchanged at $1.2382.
By: Karl Gernetzky -BusinessLIVE
Source: TMG Digital.
