Rand firms on ECB bond buying optimismComment on this story
Johannesburg - South Africa's rand opened firmer against the dollar on Thursday due to heightened optimism the European Central Bank will employ new tactics to counter the region's debt crisis, lifting the appetite for riskier assets.
The rand firmed 0.41 percent to 8.3851 at 0620 GMT against the dollar from Wednesday night's New York close of 8.42.
The euro, the currency of South Africa's largest block trading partner, jumped on Wednesday as a string of leaks from euro zone officials provided markets with more confidence on moves to bolster the region.
“The euro is higher from when we walked in. (We should) expect quite narrow ranges for the rand until the ECB decision, or more importantly the ECB press conference after the decision,” said Jim Bryson, a trader at Rand Merchant Bank.
All eyes are on the ECB's policy announcement at 1145 GMT and President Mario Draghi's news conference at 1230 GMT, as market players look for details of the bank's new bond buying programme.
Investors will also pay attention to the ECB's and Bank of England's interest rate decision in the afternoon session.
Traders see the rand within a range of 8.34-8.44, with a firmer bias if the ECB cuts interest rates.
The yield on the three year bond slipped half a basis point to 5.4 percent and that on the 14-year paper shed one basis point to 7.335 percent.
Locally, Reuters releases it's August Econometer at 0930 GMT while the South African Chamber of Commerce and Industry releases its August business confidence index at the same time. - Reuters