The rand depreciated by approximately 2.4% over the course of last week. This was directionally in line with the performance of the broader emerging market currency complex, with the US$ index rising as markets participants revised the likelihood of a US interest rate hike in December. Specifically, prior to the September FOMC meeting, the market had priced in a 40% probability of a December hike but this has been revised up to 70%. However, markets continue to expect only a gradual pace of policy normalisation in the US, as well as in the other major advanced economies. In the event, emerging market yields would remain competitive thereby supporting portfolio inflows and the emerging market currency performance.  

In the week ahead, the rand is expected to trade in a range of R14.10/USD – R13.10/USD, R16.50/EUR - R15.50/EUR and R18.70/GBP - R17.70/GBP.