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The rand briefly broke through R17.60/$ to reach its best levels since July 2023 amid dollar weakness on Tuesday morning.

By midday, the local currency was trading at R17.6067/$, after reaching R17.5990 earlier in the morning. The rand traded above R19.30 in February this year.

The dollar traded near its lowest levels of the year on Tuesday against a basket of currencies, on the eve of the expected start to a US easing cycle that markets are betting may begin with an outsized rate cut.

Fed funds futures have rallied to push the chance of a 50-basis-point rate cut to 69%, against 30% a week ago. The odds have narrowed sharply after media reports revived the prospect of a more aggressive easing.

"The rand is still strengthening on positive sentiment about the government of national unity and expectations that the Fed will lower interest rates this week," said Casparus Treurnicht, portfolio manager and research analyst at Gryphon Asset Management.

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