The rand held on to firmer levels at midday on Friday as it found support from European Central Bank (ECB) stimulus talk and hawkish warnings from the Reserve Bank.
Dow Jones Newswires reported that ECB president Mario Draghi on Thursday indicated that the governing council might provide more stimulus at its next meeting in March‚ noting that the outlook for inflation had weakened “significantly“.
At 11.30am‚ the rand was at R16.5277 against the dollar from R16.5653 previously.
Against the euro‚ the rand was at R17.9254 from R18.0108 previously. It was at R23.5508 against the pound from R23.5497.
The euro was at $1.0846 from $1.0875 previously.
Standard Bank trader Warrick Butler said that on Thursday for the fourth consecutive day the aggregate exchange resulted in net dollar sales‚ mainly from local asset managers.
“That could suggest that at worst the rand is most likely going to stabilise in the coming weeks.”
Technical indicators opened up the potential for a move to the next support level at R16.20/$‚ he said.
Earlier Barclays Research said in a morning note that warnings from the South African Reserve Bank had helped to reduce the pace of the rand’s depreciation.
“The rand firmed on Thursday after the (Bank) said again that local asset managers that have breached their prudential limits need to repatriate offshore assets. These remarks are one of the factors that support our view that the rate of rand depreciation is likely to slow‚” the bank stated.
Rand set to stabilise at present firmer levels
The rand held on to firmer levels at midday on Friday as it found support from European Central Bank (ECB) stimulus talk and hawkish warnings from the Reserve Bank.
Dow Jones Newswires reported that ECB president Mario Draghi on Thursday indicated that the governing council might provide more stimulus at its next meeting in March‚ noting that the outlook for inflation had weakened “significantly“.
At 11.30am‚ the rand was at R16.5277 against the dollar from R16.5653 previously.
Against the euro‚ the rand was at R17.9254 from R18.0108 previously. It was at R23.5508 against the pound from R23.5497.
The euro was at $1.0846 from $1.0875 previously.
Standard Bank trader Warrick Butler said that on Thursday for the fourth consecutive day the aggregate exchange resulted in net dollar sales‚ mainly from local asset managers.
“That could suggest that at worst the rand is most likely going to stabilise in the coming weeks.”
Technical indicators opened up the potential for a move to the next support level at R16.20/$‚ he said.
Earlier Barclays Research said in a morning note that warnings from the South African Reserve Bank had helped to reduce the pace of the rand’s depreciation.
“The rand firmed on Thursday after the (Bank) said again that local asset managers that have breached their prudential limits need to repatriate offshore assets. These remarks are one of the factors that support our view that the rate of rand depreciation is likely to slow‚” the bank stated.
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