Rand strengthens to below R14/$ for first time since April

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A rand note (iStock)
A rand note (iStock)

The rand strengthened to below R14/$ on Thursday morning, its best level against the greenback since late April. 

The local currency opened the day's trade at R14.05/$ and was trading at R13.95/$ at 10:05, up 0.7% on the day. .

Andre Botha, a senior dealer at TreasuryONE, said in a morning note to clients that the rand's strength could be linked to talk about rates in the US and the EU. 

"One reason for the rand and emerging market performance this morning could be the growing speculation that the Fed and European Central Bank will cut rates sooner rather than later. This could see yield-seeking behaviour being in the order of the day."

Botha said that due to the US celebrating the 4th of July public holiday, major currency moves were unlikely. 

On Wednesday US President Donald Trump had tweeted that Europe and China were playing a “big currency manipulation game”.  Botha noted the rand seemed to be defying the rhetoric for now, which would "normally equate to some uncertainty in the markets". 

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