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Johannesburg - The rand opened firmer against the dollar on
Thursday due to heightened optimism the European Central Bank will employ new
tactics to counter the region’s debt crisis, lifting the appetite for riskier assets.
The rand firmed 0.41% to R8.3851 at 06:20 GMT against the
dollar from last night’s New York close of R8.42.
The euro, the currency of South Africa’s largest block
trading partner, jumped on Wednesday as a string of leaks from eurozone
officials provided markets with more confidence on moves to bolster the region.
“The euro is higher
from when we walked in. (We should) expect quite narrow ranges for the rand
until the ECB decision, or more importantly the ECB press conference after the
decision,” said Jim Bryson, a trader at Rand Merchant Bank.
All eyes are on the ECB’s policy announcement at 11:45 GMT
and President Mario Draghi’s news conference at 12:30 GMT, as market players
look for details of the bank’s new bond buying programme.
Investors will also pay attention to the ECB’s and Bank of
England’s interest rate decision in the afternoon session.
Traders see the rand within a range of R8.34 - R8.44, with a
firmer bias if the ECB cuts interest rates.
The yield on the three year bond slipped half a basis point
to 5.4% and that on the 14-year paper shed one basis point to 7.335%.
Locally, Reuters releases it’s August Econometer at 09:30 GMT while the South African Chamber of Commerce and Industry releases its August business confidence index at the same time.
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