SA rand flat

JOHANNESBURG-The rand was flat against the dollar yesterday morning despite dollar strength amid the expectation of a US interest rate increase in March.

Nedbank Corporate and Investment Banking ( CIB) analysts said that despite the local currency’s resilience against the dollar it remained at the mercy of local political developments. Speculation of possible Cabinet reshuffle remains high.

TreasuryOne currency dealer Andre Botha said the rand had hit firm resistance at the R13,15/$ mark and had retreated all the way back to the R13 level.

He said the pullback was probably extended by the positive feeling on Wall Street as the Dow Jones closed at a record 21,115.55 points.

Botha said the rand had a positive correlation with good days on Wall Street as they typically equated to positive emerging-market sentiment.

“The positive sentiment from Wall Street would most likely cancel out the expectation of a rate hike in March, which is currently sitting on 80 percent after further hawkish statements from Fed officials.

“Should this status quo hold, we can expect the rand to trade in narrow ranges up until the rate hike is confirmed,” said Botha.

Data releases for Thursday included Statistics SA’s release of electricity production and consumption for January and the eurozone’s producer price index ( PPI) and consumer price index ( CPI) data for January.

At 8.53am the rand was at 13,0513 against the dollar from 13,0259. The rand was at 13,7403 against the euro from 13,7363 and at 16,0283 against the pound from 16,0136. The euro was at $1,0529 from $1,0546. BDLive.