The rand was weaker against major currencies on Tuesday morning as the greenback rebounded slightly.
Nonetheless‚ many analysts believe the rand is performing surprisingly well‚ considering political uncertainty domestically.
Analysts at Nedbank’s corporate and investment banking division said in a note that‚ despite the uncertainty‚ the rand had prospered. After topping R13.9575‚ it had steadily firmed and made an attempt on the technically significant level of R13.30.
Rand Merchant Bank chief currency strategist John Cairns said general dollar weakness and thin trade had helped the rand on Monday.
But he thought the dollar could enjoy a mild recovery on Tuesday‚ which would restrict the rand. Even so‚ the general trend is expected to be for the rand to continue to strengthen‚ despite the many local issues.
“We remain surprised by the rand’s remarkable strength. We should all rightly be asking what the rand is doing here. But the market can remain irrational longer than anyone can remain solvent‚ and our take is that it is not worth trying to fight against the flood‚” said Cairns.
The dollar firmed on Monday after US Treasury Secretary Steve Mnuchin said that in the long term he thought a strong dollar was positive‚ though he agreed with President Donald Trump’s comment that a strong dollar was negative in the short term.
But weighing down on the dollar was the possibility of conflict between the US and North Korea.
At 9.10am the rand was at R13.3676 against the dollar from R13.3171; R14.2346 against the euro from R14.1717; and R16.8314 against the pound from R16.7268.
The euro was at $1.0649 from $1.0641.
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