JOHANNESBURG - The rand gained to its highest in nearly six months yesterday as the US central bank kept lending rates unchanged and hinted it would hold off on cutting interest rates, fuelling global demand for risk assets.
At 5pm, the rand bid at R13.2858 to the dollar, 34cents firmer than at the same time on Wednesday, as the local currency broke through crucial technical resistance levels on its way to its best since August8.
“The tone of the (US Federal Reserve) statement certainly caused a surprise in financial markets with the rand one of the main beneficiaries overnight,” said Warrick Butler, chief trader at Standard Bank.
The rand’s surge began overnight as the Fed concluded its two-day policy meeting. It left rates unchanged.
In fixed income, the yield on the benchmark 10-year government bond dropped 15.5 basis points to 8.585percent, its lowest since mid-July.
In stocks, the blue chip JSE Top40 index was off 0.03percent to 47955.98 points and the broader all share index was little changed at 54156.75 points.
Vodacom was up 0.72percent to R120.58, shrugging off protests at its headquarters over compensation for a former employee who developed a call-back messaging service.