After the European Central Bank cut its key benchmark rate to a record low of 0.5 per cent the price of gold rose, and so did the commodity-driven Rand.
At the current exchange rate 1 US Dollar will purchase 8.9543 South African Rand as of 09:50 am GMT
The price of gold and other precious metals climbed as the ECB followed the FOMC’s lead and reasserted its commitment to supporting its region’s economy, even if that meant further policy alterations.
As financial institution Absa Capital asserted: ‘Yesterday’s 25 basis points rate cut by the ECB was also supportive of high-yielding currencies such as the rand as well, because it implied that global liquidity conditions would become more accommodative and that this extra liquidity may ultimately be redeployed into emerging-market countries. The extended improvement in precious metal prices would have also encouraged rand bulls, especially when considering that the improved prices of SA’s largest commodity exports prompted foreign investors to purchase over 2 billion Rand worth of JSE equities on the day.’
Immediately after the report the Rand strengthened to 8.9353 against the US Dollar. As local trade came to a close the Rand weakened slightly to trade in the region of 8.9426 Rand per Dollar.
Against the Euro the Rand was modestly weaker.
Ahead of the release of a potentially volatile US non-farm payrolls report the Rand has softened slightly against its peers.
Economists are anticipating that non-farm payrolls rose by 148,000 last month, compared with a gain of 88,000 in March.
One industry expert noted: ‘We could have a further big move this afternoon if the US nonfarm payroll disappoints as it did last month.’
The influential employment figures are due for publication at 13:30 GMT.
Current South African Rand (ZAR) Exchange Rates
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The South African Rand/US Dollar Exchange Rate is currently in the region of: 0.1117 <
The South African Rand/Euro Exchange Rate is currently in the region of: 0.0853 <
The South African Rand/Pound Sterling Exchange Rate is currently in the region of: 0.0719 <
The South African Rand/Australian Dollar Exchange Rate is currently in the region of: 0.1096 <
The US Dollar/South African Rand Exchange Rate is currently in the region of: 8.9543 >
The Pound Sterling/South African Rand Exchange Rate is currently in the region of: 13.9144 >
The Euro/South African Rand Exchange Rate is currently in the region of: 11.7229 >
The Australian Dollar/South African Rand Exchange Rate is currently in the region of: 9.1229 >
The Canadian Dollar/South African Rand Exchange Rate is currently in the region of: 8.8074 <
(Correct as if 09:55 am GMT)
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