Rand firms by 1.6% as dollar slides against the euro

The rand firmed by 1.6% against the dollar on Thursday morning, trading at R14.56 to the greenback by 11:40.

This is despite weakening to R14.85 on Wednesday on the back of a bullish US dollar and some weak SA trade data.

The local currency opened the day's trade at R14.78/$, and by 11:30 had traded in a range between R14.53/$ and R14.79/$.  

"We have seen the US dollar sliding against the euro. The low of the dollar against the euro was 1.1308 and currently we are at 1.1380. The weakening of the dollar has played into the rand's favour," TreasuryOne said on Thursday morning.

The spot dollar index - its value relative to a basket of six foreign currencies - was 96.59 on Thursday at 11:30, down 0.55% on the day. 

Hussein Sayed, Chief Market Strategist at FXTM, said in an earlier note to clients that the greenback couldn’t hold its gains on Thursday as many major currencies reached significant support levels, particularly the euro.

"For the dollar to keep rallying, it requires Friday’s non-farm payrolls report to beat economists’ expectations, especially on wages.

"If wage growth accelerates further the Federal Reserve may have no excuse to turn less hawkish, thus providing further push to US Treasury yields."

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