The rand maintained its positive tone against the US dollar in late trade on Wednesday, which a local trader attributed to the "calming tone" of statements by European Central Bank president Mario Draghi, though the ECB interest rate was kept unchanged at 1 percent and no mention was made of monetary easing.
Speculation mounted that the recent downturn in economic indicators could spur further monetary easing from some of the world’s key central banks.
At 16:43 the rand was bid at R8.3696 to the dollar from Tuesday’s close of R8.4443‚ Monday’s close of R8.4758‚ Friday’s close of R8.5721 and Thursday’s close of 8.5006.
It was bid at R10.4489 to the euro from its previous close of R10.51‚ and at R12.9269 against sterling from R12.9813 at its previous close.
The euro was bid at US$1.2495 from Tuesday’s close of $1.2450‚ Monday’s close of $1.2504‚ Friday’s close of $1.2418 and Thursday’s close of $1.2364.
The ECB president said the eurozone economy faced “increased downside risks” and inflation would fall below 2 percent early next year‚ but he announced only token adjustments to the ECB’s monetary policy‚ Dow Jones Newswires reported.
The ECB had already dashed some market hopes for a cut in interest rates at its council meeting earlier in the day‚ and in the subsequent press conference Draghi also confirmed that there would be no fresh injection of three-year money or any other radical new measures to support the eurozone’s money and bond markets - even though he acknowledged that some market segments were increasingly stressed.
Asked why the council hadn’t cut rates or announced another offer of three-year money‚ he stressed that “we still have very low nominal rates and negative real rates”.