The rand had a strong position on Monday when compared to the US dollar and other global currencies.
According to Reuters, the rand had its strongest levels since August 2023 and this helped improve risk sentiment.
The rand was trading at around R18.15 to the dollar at 10:05am on Monday.
The rand was trading at around R19.75 to the euro and R23.06 to the British pound.
ETM Analytics said in a research note that most valuation metrics show that the rand is undervalued and has room to appreciate.
Anchor Capital also noted that the rand performed well at the close of last week.
On Friday, the rand was impacted by the fact that the euro mostly declined against most of the major currencies. In the eurozone, consumer price inflation remained unchanged in April. In the UK, the Rightmove house price index improved in May.
Nedbank Weekly Monitor
On Friday, Nedbank also noted that the rand has made some large gains against the dollar.
In its Weekly Monitor, Nedbank said that the rand strengthened to its highest level since July 2023, as the dollar fell on higher expectations of an earlier US interest rate cut.
The bank noted US retail sales were flat in April, while CPI data was better than market expectations.
The data fuelled hopes for the US Federal Reserve to cut rates earlier, in September compared with November previously. The local currency closed at R18.18 against the dollar on Thursday last week and has broadly held on to its gains on Friday.
This growth has further developed, as illustrated by the additional gains made this morning.
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