A new round of policy easing from the world's major central banks could restore appetite for riskier emerging market currencies, boosting South Africa's rand in twelve months, a Reuters poll showed, recently.
The rand will struggle to make gains in the next three months, according to the poll of 32 analysts, but it should strengthen eventually from current levels around 8.2361 per dollar, firming almost 3 percent to 8.00 in 12 months. While the eurozone's debt crisis has left financial markets fraught with volatility, hurting riskier currencies like the rand, efforts to solve Europe's economic problems could restore some stability.
"We see the European Central Bank, and probably the US Federal Reserve being forced to undertake additional and more aggressive (action) as the euro zone crisis takes another turn for the worse going into year end," said Peter Attard Montalto, emerging market economist at Nomura. The rand has struggled to make headway this year, erasing gains it made in the first quarter of the year to being hammered to a year low of 8.71 against the dollar early last month on jitters about the health of the global economy.
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