The rand maintained a firmer bias at noon on Monday on hopes of monetary easing from the world’s leading central banks later this week.
“The rand remains a key gauge of risk appetite‚” said Mike Keenan‚ sub-Saharan currency strategist at Absa Capital. “The rand could strengthen further from the current levels if we do get signs of monetary accommodation from either the ECB or US Federal Reserve.”
At 12:15 local time the rand was bid at R8.1854 to the dollar from Friday’s close of R8.1815 and Thursday’s close of R8.2389. It was bid at R10.0442 to the euro from its previous close of R10.0726 and at R12.8381 against sterling from R12.8732 before.
The euro was bid at US$1.2271 from Friday’s close of $1.2308.
Standard Bank said in a note that while US growth momentum had clearly slowed‚ it was not clear that economic performance has disappointed sufficiently as yet to trigger a third round of quantitative easing (QE3) in the US.
“Qualifying remarks from Draghi that the ECB would continue to work within its mandate restrain our optimism on the outcome of the ECB’s policy announcement. The BOE (Bank of England) will likely stand still after monetary stimulus measures put in place earlier this month. Should policymakers fail to provide a firm signal on major policy initiatives‚ riskier currencies like the rand could be vulnerable to a correction after strong gains towards the end of last week‚” analysts at the bank said. - I-Net Bridge