Johannesburg - The rand was on the front foot in early trade on Thursday, awaiting the rates decision after the Reserve Bank
Monetary Policy Committee meeting shortly after 15:00.
At 09:00 the rand was bid at 10.1027 to the dollar from an overnight close of 10.1510. It was bid at 13.2535 to the euro from a previous 13.2074 and at 15.0862 against sterling from 15.0066 before.
The euro was bid at $1.3118 from $1.3020 overnight.
A local trader said there was very little to report in early trade, with the firmer rand mainly due to the weaker dollar.
He noted that all eyes are on the interest rate announcement later this afternoon.
The consensus is for South Africa's repo rate to be cut by 50 basis points to 11.5%, a survey of leading economists by I-Net Bridge shows.
Of the 16 economists polled, nine are expecting a 50 basis point reduction, while two are expecting a cut of 100 basis points. Five economists spoken to expect rates to remain unchanged.
The trader said that he did not expect the rand to "run away on the top side."
If the Sarb cuts by 50-100 basis points, the rand might be rewarded.
"The general rule seems to be that it is all about growth and anything that facilitates growth will be a good thing," he said.
On the other hand, if rates are kept steady, then there is the possibility of the carry trade coming into play.
"If we do not get a rate cut, that will be the interesting one," he said.
He noted that Sarb Governor Tito Mboweni's speech will be watched closely as any mention of growth will be important.
Dow Jones Newswires reports the euro is a bit higher against the dollar onThursday, but dealers are looking to take profit off more gains.
On Wednesday, the dollar fell to a two-week low against the euro as progress toward a bailout loan for US automakers encouraged investors to buy higher-yielding assets and sell the low-yielding greenback.
"We are inching closer to a formal bailout plan for the Big Three automakers," said Kathy Lien, director of currency research at GFT. "Regardless of the final outcome, the markets will cheer an end to the drawn-out drama."
The continuing trend in currency markets is for the dollar to fall when risk appetite rises.
- I-Net Bridge