The rand retained its appreciative bias for the fourth consecutive week, trading at 12.87/US$, at the time of publication, compared to 13.44/US$ a month ago. Rand strength has coincided with US$ weakness. The US$ index is presently at its lowest level since 2014. Broadly, US$ weakness can be linked to moderating US growth expectations on the paring back of expectations surrounding the implementation of Trump’s pro-growth campaign promises. Moreover, with US inflation struggling to gain sustained traction, the market-implied interest rate path continues to signal that US policy rates will rise only gradually in the coming years (see figure 12). North Korea and geopolitics remained a feature this week but emerging market inflows remained relatively supported, with the bulk of interest still concentrated in emerging market bonds.

In the week ahead, the rand is expected to trade in a range of R13.30/USD – R12.30/USD, R15.95/EUR - R14.95/EUR and R17.40/GBP - R16.40/GBP.