With the dust starting to settle in the wake of the bomb dropped by the Federal Reserve earlier in the week, the Rand pared earlier gains.
The Pound Sterling/Rand exchange rate is currently in the region of 15.6067 as of 10:50 GMT
Speculation that the rally in emerging-market and high-risk assets inspired by the Fed’s decision to continue with 85 billion Dollar bond buying may have been excessive caused the Rand to soften against peers like the US Dollar and Pound.
Yesterday the South African currency advanced on Sterling as UK retail sales failed to meet expectations, but the modest gains were short lived as Reserve Bank Governor Gill Marcus warned that the Rand would remain under pressure as a result of the volatility triggered by the Fed’s surprising stance.
Meanwhile, the Rand eased away from a four-month high against the ‘Greenback’.
The GBP/ZAR exchange rate hit a high of 15.6444 Rand per Pound
According to one strategist; ‘The Rand pullback reflects the global pattern: the market thinking is that the reaction to the Fed decision was overdone. After all, tapering has just been postponed. There is uncertainty once again but the consensus seems to be swaying towards a tapering announcement at the December Fed meeting.’
News that the UK’s budget deficit narrowed (albeit by less-than-forecast) also gave the Pound a little boost during the European session and weighed on the ZAR/GBP pairing.
Next week the only South African news to really watch out for is the nation’s consumer confidence figures, due out on Wednesday.
US data will also be of significant interest, as any positive results are likely to contribute to speculation surrounding when the Federal Reserve will actually begin easing.
Current South African (ZAR) Exchange Rates:
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The US Dollar/South African Rand Exchange Rate is currently in the region of: 9.7214 >
The Pound Sterling/South African Rand Exchange Rate is currently in the region of: 15.6067 >
The Euro/South African Rand Exchange Rate is currently in the region of: 13.1775 >
The Australian Dollar/South African Rand Exchange Rate is currently in the region of: 9.1565 >
The New Zealand Dollar/South African Rand Exchange Rate is currently in the region of 8.1615 >
The Canadian Dollar/South African Rand Exchange Rate is currently trading in the region of 9.4744 >
(Correct as of 10:50 GMT)
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