The South African rand rode the tailwinds of recovering risk sentiment while the dollar toppled from a one-month high according to NKC Research. Picture: Karen Sandison/African News Agency(ANA)
The South African rand rode the tailwinds of recovering risk sentiment while the dollar toppled from a one-month high according to NKC Research. Picture: Karen Sandison/African News Agency(ANA)

Rand strengthens as dollar slips

By Dhivana Rajgopaul Time of article published Jan 20, 2021

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JOHANNESBURG - The South African rand rode the tailwinds of recovering risk sentiment while the dollar toppled from a one-month high according to NKC Research.

While we retain a bullish outlook on the rand, shaped by a policy-led softening dollar narrative, the short-term risks to high-beta are now more elevated than we estimated in December.

In turn, we expect the rand’s carry appeal allure to dim somewhat with the MPC seen as trimming the repo rate by 25 bps this week.

At the close of local trade, the rand quoted 1.21 percent stronger at R14.98/$, after trading in range of R14.92/$ - R15.20/$. The rand traded steady overnight. Expected range today R14.80/$ - R15.20/$.

South African bourse

The JSE All Share (-0.17 percent) ended lower yesterday, dragged by losses in large gold (-3.88 percent) stocks. In the overall emerging market sphere, the MSCI Emerging Market Index (+1.01 percent) traded in the black buoyed by optimism over the incoming Biden administration.

Brent crude oil

The Brent oil price rose during yesterday’s trading session fuelled by stimulus optimism, boosting fuel demand prospects, which countered concerns about renewed economic lockdowns. At the close of local trade, benchmark Brent crude futures quoted 1.07 percent higher at $55.48pb. Crude prices traded firmer during Asian trade this morning.

BUSINESS REPORT ONLINE

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