Johannesburg – The rand strengthened against the US dollar on Wednesday morning as the US averted the fiscal cliff via a last-minute deal.
Dow Jones Newswires reported that the Senate passed a bill on Tuesday that blunted the effects of the fiscal cliff‚ with an agreement that would delay spending cuts but increase income tax rates for the first time in two decades.
At 08:29‚ the rand was bid at R8.4168/$ from its previous close of R8.4517. The local currency was bid at R11.1801/€ from its previous close of R11.1520 and at R13.7434/£ from R13.7227 before.
The euro was bid at $1.3272 from its overnight close of $1.3197.
Without an agreement to avert some of the $600bn in planned tax increases and spending cuts‚ investors had worried the US economy may be sent into a recession.
Regional markets climbed higher as the session progressed‚ with gains increasing as the House of Representatives started to vote on the bill‚ and finally passed it.
Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.