South African rand to hold most gains since start of 2018

South Africa’s rand is expected to hold onto most of this year’s gains against the dollar, supported by improving domestic economic growth, as long as the U.S.-China tariff tussle does not disturb global trade flows.

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A Reuters poll of 30 strategists taken April 3-5 showed the rand is expected to remain mostly resilient against the dollar, around 11.93/$ by end-September, and to slip slightly to 12.13/$ by this time next year.

The currency began the year at 12.40 per dollar.

“What has been driving our rand forecast is that the emerging market fundamental backdrop still looks strong, particularly the interest rate and growth differentials,” said Mike Keenan, strategist at Absa Capital. “That should help the rand sustain this year’s gains.”