Johannesburg – The rand strengthened as optimism surrounding Tuesday’s GDP release died down and souring business confidence weighed, but the dollar index turned negative following the US CPI release according to NKC Research.
Against the broader external backdrop, the ongoing discount-rate shock will be a temporary setback to risk asset valuations rather than scuttle the equity bull market in place since March last year.
Despite the latest sell-off, the divergence between our growth outlook and bond yields is large enough to keep the pressure on Treasury yields upwards in coming months.
At the close of local trade, the rand quoted 1.29% stronger at R15.16/$, after trading in range of R15.11/$ – R15.37/$. The rand extend gains overnight. The expected range of the rand against the dollar today is R14.90/$ – R15.20/$.
