SA rand perks up

JOHANNESBURG. — The rand was a shade stronger yesterday morning, partly reflecting an improvement in global risk appetite.

In the absence of fresh developments in the US-North Korean standoff, markets appeared more willing to dip into risky assets.

For the better part of last week, markets were on edge as the war of words between Washington and Pyongyang threatened to boil over into a military confrontation.

The rand changed hands at about R13,36 to the dollar in early trade yesterday — a notable improvement on the lows of R13,54 seen last week.

The rand’s improving fortunes were also due to a weaker dollar, following weaker than expected US inflation figures on Friday.

US consumer prices rose at an annual 1,7 percent in July, up slightly from 1,6 percent in June, but lower than the expected 1,8 percent.

The muted inflation pressures could persuade the US Federal Reserve to increase interest rates at a slower pace.

The slower rate of US monetary policy tightening has potential to keep emerging-market currencies such as the rand relatively well supported. At 9.21am, the rand was at 13,3681 to dollar, from 13,4421, at 15,8070 to the euro from 15,8895 and at 17,3903 to the pound from 17,4750. The euro was at $1,1824 from $1,1823.