Rand strength­ens against dol­lar af­ter in­ter­est rate hike

Weekend Argus (Saturday Edition) - - LIFE -

THE rand traded at two-week highs against the dol­lar yes­ter­day, still boosted by the cen­tral bank un­ex­pect­edly rais­ing in­ter­est rates the previous day to curb in­fla­tion pres­sures.

Stocks ended slightly higher, led by Mr Price as in­vestors piled into the dis­count clothes re­tailer af­ter a bro­ker up­graded the stock to “buy”.

The rand climbed to 13.8900 per dol­lar dur­ing yes­ter­day’s ses­sion, its strong­est since Novem­ber 6, and was trad­ing at 13.9300 by 1550 GMT, up 0.7 per­cent on the day.

This was af­ter the cen­tral bank raised the bench­mark repo rate by 25 ba­sis points on Thurs­day, warn­ing that fail­ure to act on in­fla­tion risks could worsen the coun­try’s al­ready weak growth.

Traders and an­a­lysts, how­ever, warned the cur­rency could come un­der re­newed pres­sure should the US Fed­eral Re­serve hike lend­ing rates in the world’s big­gest econ­omy next month, as widely ex­pected.

“The rand is in an in­ter­est­ing at­tempt to es­tab­lish a new, bullish chan­nel, but it is un­likely to per­sist through De­cem­ber, as mar­ket jit­ters arise again in the lead up to the De­cem­ber FOMC (Fed­eral Open Mar­ket Com­mit­tee),” In­vestec an­a­lyst Annabel Bishop said.

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