CAPE TOWN – The rand strengthened to R 11.94 to the greenback on Wednesday morning, mainly driven dollar weakness. The currency opened at R12.3/$, strengthen to as much as R11.94 by mid-morning.
Musa Makoni, Trader at EasyEquities explained that the dollar had been taking a “big hit” since yesterday, and has been under significant pressure for a while.
He also added that the local political situation is relatively quiet. “There’s nothing to disturb the peace,” he said.
TreasuryOne dealer Gerard van der Westhuizen echoed views that the rand’s gains were on the back of a weakening dollar as the euro firmed.
“The DXY (dollar index) traded on the lowest point since December 2014 after consumers confidence in the eurozone rose by 1.3 points, which was well above the market consensus of 0.6 points.
“Growth in the eurozone has been one of the main drivers of the EURO/USD exchange rate lately and EUR rally does not seem to lose steam,” van der Westhuizen said.
There is great positivity over the UK economy, with sterling having risen to a new high. The dollar is $1.40 to the pound.
TreasuryOne‘s head of dealing Wichard Cilliers says: “The dollar is weaker across the board and this has helped the rand beak the R12/$ level for the first time since 2015.