After reaching R15.45/$ scarcely two weeks ago, the rand has strengthened to its best level in more than a month.
Earlier on Tuesday, the rand reached R14.66. Later on Tuesday, it slipped to R14.71/$, while trading at R16.23/euro and R18.19/pound. It was also close to breaking through the R10 level against the Australian dollar.
Currencies that offer fat interest rates, like the rand, are gaining ground ahead of a meeting by the European Central Bank on Thursday. Investors expect that European interest rates may be cut - which will leave the rand looking even more appealing. The bank could also announce stimulus measures. The US central bank is also expected to cut rates this month.
Andre Botha, senior dealer at TreasuryONE, says that the rand started to gather steam on Monday thanks to foreign investments into the bond and equity market.
Manufacturing data, released on Tuesday, were grim - but better than economists expected and may have provided some support to the rand. SA factory output contracted by 1.1% in the year to July - compared to expectations of a 1.4% fall. From June to July, manufacturing rose by 0.4%,
While the rand has backed off from its weakest levels this year, it is also still far from the R13.24/$ reached in February this year.