PRETORIA – The rand strengthened more than 2% or 30c against the dollar on Monday amid market talk of further corporate deals supporting the currency.
Higher oil prices and the weaker dollar also supported emerging-market currencies.
In the late afternoon the rand was trading at R14.6813 to the dollar from R14.9917 at Friday’s close. It was at R16.7449 against the euro from R17.1195 previously‚ and at R20.9049 against the pound from R21.1665 previously.
The euro was at $1.1405 from a previous close of $1.1417 after earlier firming to $1.1428.
Rand Merchant Bank currency analyst John Cairns said the rand was again doing well following the Associated British Foods takeover offer for Illovo Sugar.
“The deal will probably be approved at the Illovo shareholder meeting in May‚ followed in turn by inflows.”
Deals affecting Aveng and Eqstra in the construction sector could also be in the making‚ though a 10% sale of Barclays Africa to locals could more than offset gains for the rand‚ Cairns said.
Political issues were still affecting rand sentiment‚ he said‚ as the Gupta family ostensibly relocating to Dubai could have political ramifications. The currency implications were limited because of exchange controls.
The dollar was again under pressure. Losses remain particularly sharp against the yen‚ which spurred rallies in most Asian currencies. The euro has pushed back beyond $1.14‚ but was struggling to extend its gains.
“It needs to break through $1.1450 for the rand to firm below R14.60/$ again‚” Cairns