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JOHANNESBURG — The rand was trading at firmer levels at midday on Friday but analysts expect the local currency to remain under pressure.

At 11.30AM the rand was at 13,7898 against the dollar from its previous close of 13,8932.

The local currency was at 15,1726 against the euro from 15,2624 and at 21,1391 against the pound from a previous close of 21,2696.

The euro was at $1,1002 from a previous close of $1,0986. Analysts say the rand continues to experience the negative after effects of the hawkish stance expressed by the US Federal Reserve’s Federal open market committee (FOMC) earlier in the week.

“Prior to the FOMC data on Wednesday evening the rand had held relatively steady, thereafter the rand has come under sustained pressure, the local unit (being) among the worst of the emerging market performers,” Nedbank Capital said in a note.

Trading was subdued ahead of the release of local trade data in the afternoon. Traders expect the local currency to remain range bound, trading in a relatively wide range of between 13,70/$ and 14/$ for most of the day.

Higher exports and lower imports led to a trade surplus in the second quarter and were the main reason for the sharp narrowing in the current account deficit over the period.

A trade deficit of R1,1bn was recorded in July‚ while a shortfall of R9,9bn was recorded in August.

Another trade deficit is expected for September. This would indicate a widening of the current account deficit in the third quarter‚ which will in turn contribute to rand weakness.

Further numbers expected on the day include personal income, personal spending, private consumption expenditure (PCE) core, employment cost index and Michigan survey data from the US. — BDLive