Rand firmer as emerging markets rally
The South African rand firmed against the dollar yesterday as traders moved into emerging currencies, trading at R7.55 to the dollar, up 18.9 cents on Monday.
In other currency exchange trading, the yen traded down slightly at
118.84 to the dollar and the euro rose slightly to trade at $1.25, while sterling traded at $1.86.
The rising rand follows a scramble out of emerging market currencies sparked by political uncertainty, pushing the rand down to three-year lows of R7.98 to the dollar.
"It's all offshore on the back of emerging markets rallying and the market correcting its positions," an SA dealer told Business Report.
"It's ignoring what the dollar's doing.
"Over the past few days, the spike up [weaker] was just to clear out short dollar positions. I think we've had the worst. People have had enough of that."
The rally came as SA's Nedbank described the rand's recent volatility as "irrational" in a monthly report on currency exchange trading.
It had weakened "mostly when the dollar was weak or stable but staged its comeback as the dollar strengthened against other major currencies and when commodity prices were, if anything, neutral", said the bank.