JOHANNESBURG – The rand hovered near a 22-month high as dovish rhetoric by the US Federal Reserve fed into a softening dollar, according to NKC Research.
The external environment continued to provide a soft landing for the rand, cushioning the local currency from a still-weak fiscal position, despite a brightening outlook for merchandise trade.
In the US, bipartisan talks on an infrastructure package took a step back last week.
US President Joe Biden’s $1.7 trillion (about R23.5 trillion) counteroffer, down from $2.3 trillion in the American Jobs Plan (AJP), did little to bridge the gap with the Republicans, whose latest public offer totalled $568 billion. Even if the two parties could agree on a top-line spending number, they remain far apart on offsets to pay for a package.
If an agreement is not reached this week, the Democrats will shift to moving the AJP, perhaps with the American Families Plan, through the budget reconciliation process. Passage could occur before the August summer recess, but that’s not assured.
At the close of local trade, the rand was 0.36 percent stronger at R13.85 to the dollar, after trading in range of R13.82 to R13.93. The rand remained on the front foot overnight. The expected range of the rand against the dollar today is R13.75 to R13.95.
Brent crude oil
The price of Brent oil increased yesterday after rallying strongly in the previous session, as traders tempered expectations that Iran would soon recommence supplying oil to global markets. At the close of local trade, benchmark Brent crude futures were 0.28 percent higher at $68.68 per barrel.