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#RandReport: Rand firms as leading central banks seen keeping rates low

The US Federal Reserve would not now be able to raise rates in the coming months.

By 1408 GMT, the rand was trading at 14.5200 versus the dollar. Picture:Christa Eybers/EWN

JOHANNESBURG - The rand firmed alongside other emerging market currencies on Friday as investors bet that leading central banks would keep rates low to minimise the damage to the global economy after Britons voted to exit the European Union.

A hint from the Bank of England on Thursday that interest rates would be cut in the coming months gave risk appetite a further boost and strengthened the view that the US Federal Reserve would not now be able to raise rates in the coming months.

By 1408 GMT, the rand was trading at 14.5200 versus the dollar, up 1.46 percent from Thursday's close, edging closer to 14.3015 where it traded before the Brexit result on June 24.

Government bonds also firmed, with the benchmark government issue due in 2026 cutting 15 basis points to 8.69 percent.

"Although there is still a lot of uncertainty about what (Brexit) might mean, investors are focusing on the fact that it could potentially trigger more policy easing from major global central banks," ETM market analyst Jana van Deventer said.

"Some additional support for the rand stems from the trade data we saw yesterday, it shows the economy is rebalancing which is bullish for the rand."

The revenue service on Thursday reported a bigger-than-expected trade surplus of 18.73 billion rand in May, after April's 127 million rand shortfall.

The trade data augurs well for South Africa's current account, which has traditionally been a source of vulnerability for the rand and widened to 5 percent of GDP in the first quarter of the year.

On the bourse, the Top-40 index was 0.11 percent up at 46,031 points while the broader All-share 0.31 percent edged up 52,377 points.