Rand off worst level‚ MPC in focus

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IOL world currency1 Graphic: Renjith Krishnan.

The rand remained broadly under pressure against major currencies in early trade on Thursday‚ though it pulled away from the nearly R9/US dollar level it reached on Wednesday.

At 8.55am‚ the rand was bid at R8.9500 to the US dollar from Wednesday’s close of R8.9695. The local currency was bid at R11.4939 to the euro from its previous close of R11.5394 and at R14.2751 against sterling from R14.3186 before.

The euro was bid at $1.2845‚from Wednesday’s close of $1.2860.

Absa Capital analysts said in a note that the rand weakness could have been due in part to participants anticipating its continued weakness‚ as well as the fact that US markets will be closed on Thursday for the Thanksgiving holiday.

However‚ attention switches to the outcome of the two-day local monetary policy committee (MPC) meeting on interest rates.

“While we are of the opinion that the South African Reserve Bank will keep interest rates unchanged at today’s meeting‚ a more dovish tone would probably see the ZAR depreciate slightly. A sterner or less-dovish tone would contribute to a stronger ZAR performance in our opinion‚” the analysts said. - I-Net Bridge

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