The rand strengthened for a fourth consecutive day against the US dollar on the back of expectations that the European Central Bank (ECB) will ease monetary policy later this week to boost growth in the debt-ridden eurozone‚ as well as a stronger gold price.
“We are benefiting from a strong gold price and the increased risk appetite. The potential of an ECB rate cut has also improved global sentiment‚ which is benefiting emerging markets‚” Bridget Taylor of Nedbank said.
On Thursday‚ Europe’s central bank looks to join a list of other central banks that have cut rates to boost flagging growth as inflation concerns ease on lower food and fuel costs. Last week‚ the bank agreed to a banking union in the region that would be able to recapitalise banks directly.
At 16:17‚ the rand was bid at R8.0821 to the dollar from its previous close of R8.1505. Over the past four days‚ the currency has appreciated 4.1% against the greenback. It was bid at R10.1672 to the euro from its previous close of R10.2549 and at R12.6906 against sterling from R12.7865 before.
The euro was bid at US$1.2574 from its previous close of $1.2584.
The dollar was broadly steady against the euro and a range of currencies in European trade on Tuesday as traders hunkered down ahead of a US holiday and a key week of US data and European interest rate decisions‚ Dow Jones Newswires reported.
The euro traded around the $1.2580 mark against the dollar‚ while the pound largely traded a little below $1.57.
Bonds firmer on foreign buying
South African bonds moved firmer in late trade on Tuesday‚ after a successful weekly bond auction by the National Treasury‚ with strong take-up by international bond investors.
At 16:00‚ the benchmark R157 bond was trading at 5.950 percent from Monday’s close of 6.020 percent. The R207 was trading at 7.000 percent from a previous close of 7.100 percent and the R186 was trading at 7.850 percent from its previous close of 7.940 percent.
The rand was bid at R8.0603 against the dollar from Monday’s close of R8.1505. The rand was last below R8 per dollar on May 10.