Rand flat‚ eyes Fed announcement

The rand was flat on Wednesday morning as traders eyed the Federal Open Market Committee (FOMC) meeting ending later on Wednesday.

“Rand bulls are still managing to consolidate their recent gain in the run-up to tonight’s FOMC policy announcement‚ at which the Fed is expected to replace Operation Twist with another round of bond purchases‚” Absa Capital said in a note.

Graphic: Renjith Krishnan.

At 8.33am‚ the rand was bid at R8.6500 to the US dollar from Tuesday’s close of R8.6560. The local currency was bid at R11.2492 to the euro from its previous close of R11.2594 and at R13.9328 against sterling from R13.9467 before.

The euro was bid at $1.2998 from Tuesday’s close of $1.3011.

“This indefinite source of monetary accommodation from the Fed (ie‚ $45bn worth of US Treasury purchases per month) is providing some support for risky assets like the rand at a time when there is still a lot of underlying anxiety surrounding the looming US fiscal cliff‚” Absa Capital said. - I-Net Bridge