Rand at 8.23 against the US dollar

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IOL world currency1 Graphic: Renjith Krishnan.

The rand was range-bound in midday trade ahead of the Federal Open Market Committee (FOMC) meeting‚ which is set to conclude later on Wednesday.

Standard Bank analysts said they were not looking for a material change from the Fed on policy‚ but expected enough encouragement in rhetoric regarding the possibility of easing ahead‚ and a pushing back of rate-hike expectations.

“The rand is pretty much range bound ahead of the FOMC info and ECB meeting on Thursday. The markets are waiting for direction from these meetings. Generally speaking‚ I think policymakers will do as much or more than the markets are expecting on quantitative measures‚” said Mohammed Nalla‚ Strategic Analyst at Nedbank.

At 11:41 local time the rand was bid at R8.2356 to the dollar from Tuesday’s close of 8.2599. It was bid at R10.1362 to the euro from its previous close of R10.1569 and at R12.8761 against sterling from R12.9397 before.

The euro was bid at US$1.2307 from Tuesday’s close of $1.2297.

Meanwhile Dow Jones Newswires reported that the dollar fell to a two-month low against the yen on Wednesday in Asia on the back of selling by Japanese exporters‚ but trading was generally quiet as market participants wait for a Federal Open Market Committee meeting results later in the global day.

Overall trading was subdued ahead of the closely watched FOMC meeting.

Markets speculate that the Fed could take new action to spur growth‚ such as buying mortgages or government securities to bring down long-term interest rates‚ or simply promise to do more later if necessary. Officials may take the option of waiting until September‚ when they will formally update their economic forecasts‚ before deciding on anything significant. - I-Net Bridge

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