Rand firms as dollar woes continue
Business Day of South Africa
THE rand was firmer against the dollar in the late afternoon on Monday as the greenback continued to show weakness against the euro.
The rand gained 5% to the dollar last week. The greenback has undergone a big correction recently as the expectation of a near-term increase in US interest rates faded after dovish comments from US Federal Reserve chairwoman Janet Yellen.
Emerging-market currencies, including the rand, the Brazilian real and the Russian rouble, have benefited.
At 3.26pm‚ the rand was at R14.6821 to the dollar from R14.7321 at Friday’s close. It reached a best level of R14.6294/$ in morning trade.
It was at R16.7428 against the euro from R16.7441 previously‚ and at R20.9999 against the pound from R20.9536 previously.
The euro was at $1.1403 from $1.1401 previously. The dollar weakened to $1.1413 in intraday trade.
Bidvest Bank analysts said speculators cut net long positions on the dollar last week. This was the second consecutive week in which bullish bets on the dollar had been trimmed, with net short positions on the euro cut and bullish positions on currencies such as the Australian dollar and Japanese yen increased.
“For the rand this would offer some relief given the backdrop of negative domestic sentiment,” Bidvest Bank said.
Dollar Slips to a 17-Month Low Against Yen
The U.S. dollar hovered around 109 yen in Tokyo on Thursday morning, as Federal Reserve policy meeting minutes dulled expectations of an early U.S. interest rate hike. The greenback hit levels last seen back in October 2014 fetching 109-25-27 yen at noon, down from 109.74-84 yen in New York and 110.40-42 yen in Tokyo at 5 p.m. Wednesday.
The dollar recovered somewhat in Tokyo trading before falling again below the low of 109.34 yen reached in New York overnight following the release of minutes of the March 15-16th Federal Open Market Committee meeting. The minutes suggested that the central bank appears unlikely to raise interest rates until global growth looks more positive and probably not before June. A rate hike would make the dollar stronger against the yen.
US DOLLAR SLIPS (AAP)
An index of global stocks has climbed to near its highest point of the year while the US dollar weakened as easing concerns about potential interest rate increases led investors into riskier assets.
Oil prices edged higher on Wednesday, paring stronger initial gains as US crude inventories built up.
Federal Reserve Chair Janet Yellen said on Tuesday the US central bank should proceed cautiously as it looks to raise interest rates, pushing back on a handful of her colleagues who had suggested another move may be just around the corner.
Yellen’s comments were echoed on Wednesday by Chicago Fed president Charles Evans, who said there was a high hurdle to raising rates in April, given low inflation.
“It’s been a pretty nice couple of days here thanks to the Fed after they caused some angst earlier in the week,” said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.
The Dow Jones industrial average rose 83.55 points, or 0.47 per cent, to 17,716.66, the S&P 500 gained 8.94 points, or 0.44 per cent, to 2,063.95 and the Nasdaq Composite added 22.67 points, or 0.47 per cent, to 4,869.29.
The pan-European FTSEurofirst 300 index advanced 1.3 per cent.
MSCI’s index of world shares gained 1.1 per cent. The index pulled back from stronger earlier-session gains that had put it in positive territory for 2016.
After sliding on Tuesday against a basket of major currencies, the US dollar fell another 0.3 per cent. It is down about 4 per cent this year and on track to post its biggest quarterly percentage decline in five years. The euro rose 0.4 per cent against the US dollar on Wednesday.
Traders are “trying to digest the dovish (Yellen) comments and assess whether this is a real turning point for the Fed”, said Steven Englander, managing director and global head of G10 FX strategy at Citigroup in New York.
US private employers added 200,000 jobs in March, above economists’ expectations, a report by a payrolls processor showed.
Oil prices gained, buttressed by the weak US dollar, which makes commodities denominated in the greenback more attractive to users of other currencies. But they pulled back as a report showed that US crude stockpiles rose 2.3 million barrels last week.
US crude prices settled up 4 US cents at $US38.32 a barrel, after rising about 3 per cent earlier, while benchmark Brent settled up 12 US cents at $US39.26 a barrel.
Oil prices have rebounded about 50 per cent since mid-February after major producers within and outside OPEC floated the idea of freezing production at January’s highs.
Shorter-dated US Treasury yields fell as traders piled on bets the Fed would raise interest rates gradually in the coming months. Benchmark 10-year Treasury notes traded down 5/32 in price, to yield 1.8281 per cent.
Originally published as US dollar slips, oil prices pare gains