The rand rallied to a fresh two-week high against the dollar on Tuesday morning.
The local currency outperformed relative to other currencies broadly stuck in their recent ranges ahead of meetings this week of central banks including the US Federal Reserve to decide on interest rates.
The rand pushed to session highs of 13.9181/$‚ its best level since September 8. As recently as last week‚ the local unit traded at R15.59/$.
“Event risk today is low‚” said Rand Merchant Bank currency strategist John Cairns. “US housing market data might impact marginally this afternoon‚ but it is clear that global markets are in a wait-and-see mode.”
The dollar was on the defensive in early trade ahead of the Fed verdict on rates on Wednesday night. Markets see little chance of a US rate hike after a round of mixed data recently.
“Technically‚ the rand is still looking good as per our medium-term forecast‚” said Standard Bank trader Warrick Butler. “The close below R14.05/$ bodes well for the rand.
“If one could take all the noise of central bank meetings and EM currencies out of the equation and just look at the rand chart there is still overwhelming evidence for a stronger rand.”
At 9.06am‚ the rand was at R13.9181 to the dollar from Monday’s R14.0133. It was at R15.6026 to the euro from R15.6575 and at R18.1809 to the pound from R18.2571.
The euro was at $1.1211 from $1.1174 previously.