The rand surged in overnight trade against the US dollar on Wednesday reaching R13.52 at one stage (after midnight) and is set to test the psychological R13.50 level.
Rand/dollar exchange rate over 1 year
It is at a new multi-year high against the greenback, with the rally fuelled by better-than-expected economic forecasts out of the South African Reserve Bank and other financial institutions in recent weeks.
The boom in commodity prices is playing a starring role.
Despite worsening unemployment figures released on Wednesday, the fact that the job losses came in slightly lower than forecasts, also seemed to buoy the rand.
The currency surged over 1.6% after midnight (to R13.52) and by 08h00 on Thursday was trading at around R13.55 to the dollar.
In a morning note on Thursday, currency strategist at TreasuryONE Andre Cilliers said that positive risk sentiment was also a factor, which kept the dollar on the back foot and saw US bond yields decline.
“The rand continues to outperform its emerging market peers as commodity prices remain elevated and good resource-based exporter dollars flood the local market,” he pointed out.
Cilliers said a sustained break of the R13.50 level could see the rand target R13.35 in the short term.
The JSE All-Share Index also closed above the 69 000 level for the first time ever yesterday at 69 049.