JOHANNESBURG – The rand was sharply firmer in late afternoon trade on Thursday as the dollar retreated on disappointment at president-elect Donald Trump’s media conference on Wednesday.
After firming before the conference‚ the dollar lost nearly 1% against the euro in late afternoon trade and was sharply weaker against the yen and the pound.
Trump‚ who will be sworn in as the US president next week‚ did not provide detail on his promised economic stimulus policies of higher fiscal spending and corporate tax cuts.
The rand reached a two-month best level of R13.4107‚ gaining more than 30c‚ before losing ground somewhat toward the late afternoon.
At 3.39pm‚ the rand was R13.4824 to the dollar from a previous R13.7327‚ R14.3686 to the euro from R14.5451 and R16.5651 to the pound from R16.7835. The euro was $1‚0658 from $1‚0583.
Rand strength confounded analysts who had expected the currency to be under pressure on the day after weakening in the Turkish lira and Mexican peso.
But Capital Economics said that emerging-market currencies had become much more resilient‚ notably the rand and Brasil’s real. Bouts of dollar strength have in the past caused problems for emerging markets‚ notably Argentina’s in 2001.
“But today these currencies were generally backed with much larger foreign exchange reserves‚” Capital Economics said.