The rand gained ground in early Tuesday trade amid hopes the fallout from Chinese property firm Evergrande’s debt debacle might be contained.
AT 0650 GMT, the rand was trading at 14.6800 against the dollar, 0.58 percent stronger than its previous close.
However, much could change, analysts said, as a batch of local and foreign economic indicators could decide whether investors rush to the safe haven dollar or restore riskier bets.
Evergrande’s debt payment obligation tomorrow will also be an important indicator for emerging market currencies, including the rand.
“The local currency has been hit on three fronts, as China’s corporate debt woes, the rout in commodity prices and a strong dollar weigh on it,” said Andre Cilliers, currency strategist at TreasuryONE.
The rand has moved from being the best performing emerging market currency to the second-worst behind the Turkish lira, Cilliers said.
The US Federal Reserve’s meeting on September 21-22 will be a critical event for all emerging market currencies as a tapering of its stimulus measures would likely prompt a flight of capital to the dollar.
The South African Reserve Bank’s monetary policy meeting on September 23 will also be a key event for the local currency.
REUTERS