The rand has been buoyed by a number of global factors as the past two weeks have seen markets turn from skittish and risk-averse to an emerging market dream, says Bianca Botes, treasury partner at Peregrine Treasury Solutions.
“It is clear that the rally in the rand is in no way a result of local elements,” she said.
“Rather, the improvement witnessed in the local unit over the past two weeks can be attributed to two key global factors that are driving risk appetite.”
Botes said that these factors include: Continuous monetary easing by central banks including the Chinese Central Bank, European Central Bank and the Federal Reserve; A possible easing in trade tension between the US and China.
“On Thursday we saw a massive retracement in the rand, gaining as much as 1,5 percent against major currencies on the back of the ECB rate cut and quantitative easing decision,” Botes said. — businesstech.co.za