The South African rand was expected to test the key psychological six per dollar level on Thursday as it continued to rally on the back of offshore demand for the local unit.
At 08h49, the rand was quoted at its best level since January 7, 2000, of 6,0451 per dollar from an overnight close of 6,10 on Wednesday and 6,2876 on Tuesday. It was quoted at 7,5636 to the euro from a previous 7,5639 and at 11,2010 against sterling from Thursday’s 11,3640.
The euro was quoted at $1,2365 from $1,2366 late on Wednesday and $1,2285 late on Tuesday, while gold was quoted at $400,75/oz from a previous $402,10/oz.
“I think the rand will test six today — there is a lot of offshore demand for it,” a currency trader said.
He added that the strength was a continuation of the rand’s recent trend.
“The rand should look to form a base between 5,95 and six. I don’t think it will break dramatically below six, but the bias is still for a stronger rand,” he concluded.
The rand’s previous long-term best level of 6,06 per dollar was reached on Wednesday evening, while on Friday night, it was quoted at 6,07 per dollar.
The rand roared ahead on Wednesday on the back of higher commodity prices and a rally by commodity currencies. Dollar weakness added to the positive picture.
According to AFX, the dollar hit three-month lows against the euro and British pound and five-month lows against the Swiss franc on Wednesday as investors continue to scale back expectations for the Federal Reserve’s aggressiveness with interest-rate hikes. – I-Net Bridge