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The rand has been at the forefront as the disputed race for the White House tips in favor of Democrat Joe Biden.
The local currency was trading at R15.71 / $ just after 4:30 PM on Friday, having tested below the R15.70 / $ mark in night trading, and following news that Biden had ahead of incumbent Donald Trump in the crucial state of Pennsylvania.
“The outcome of the elections in the United States is not official yet, but it seems highly likely that Joe Biden will be the next president of the United States. President Trump broke his silence and mentioned that he will go to court because he feels that the election is is carrying out. ‘stolen’ from him. This has not deterred risk in the market sentiment and emerging market currencies rallied strongly yesterday, “Andre Botha, senior currency trader at TreasuryONE, said on Friday for the afternoon.
“This is all due to the expectation that there will be excess liquidity in USD that is going to make the rounds and needs a home. For now, we think the ZAR has had a very good run and could possibly return some of the profit to short term before racing to higher levels again. “
Bianca Botes, CEO of Peregrine Treasury Solutions, similarly commented earlier that the strength of the rand was being driven by the potential for a Biden win. “The Federal Reserve is building momentum, indicating that governments and central banks will have to do more to support the economy,” he said.
Meanwhile, while eyes remained fixed on the election, US nonfarm payroll numbers were better than expected in October, hitting 638,000 versus an initial cost of 580,000. Unemployment, meanwhile, it fell from 7.4% to 6.9%.
