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JOHANNESBURG – THE rand was weaker at midday yesterday after the dollar strengthened in overnight trade.

Analysts cautioned earlier that the rand’s recovery could be tempered heading into this week’s Reserve Bank Monetary Policy Committee (MPC) meeting.

The market was pricing in an 84 percent probability of a 50 basis points increase, Barclays Research said.

At 11.27AM, the rand was at 16,5125 against the dollar from 16,4718 previously. Against the euro, the rand was at 17,8753 from 17,7721 previously. It was at 23,5380 against the pound from 23,5850.

The euro was at $1,0826 from $1,0791 previously. Analysts at Momentum SP Reid say a stronger dollar has been one of the most meaningful technical adjustments on global currency markets in recent sessions.

The US currency has gained traction in the wake of encouraging hints by European Central Bank (ECB) president Mario Draghi, that additional stimulus from the ECB was likely.

“Additional improvement by the euro towards $1.0686 cannot be excluded as a near-term target,” the Momentum SP analysts said yesterday.

“The rand has not yet hit our intermediate target at about R16.28/$, but the domestic currency continues to exhibit modest technical improvement,” they said.

“The performance of the dollar versus most global currencies is likely to determine the near-term direction of the rand.” – BDLive