Johannesburg – The rand kept a softer bias in afternoon trade on Thursday, tracking the euro/US dollar movement, as attention switched back to Spain’s fiscal woes after the US Federal Reserve’s statement.
At 15:58 the rand was bid at R8.2667 to the dollar from Wednesday’s close of R8.1984. It was bid at R10.4300 to the euro from its previous close of R10.4102 and at R12.9341 against sterling from R12.8877 before. The euro was bid at $1.2627 from Wednesdays’s close of $1.2691.
“The risk-off scenario is slowly creeping back in after the Fed’s disappointing statement,” said Lynden Reabow, FX trader at PSG Prime.
The US Fed extended its Operation Twist programme - whereby the central bank sells short-term Treasury bills and puts the money into longer-term securities - by $267bn through to the end of 2012.
The Fed also revised down its economic growth forecasts for the US from 2.4%–2.9% at the previous FOMC meeting to 1.9%–2.4%.
“I think the rand is trying to consolidate around this level following the strong run it had in recent sessions. I would not describe the current levels as risk-off trade,” said Malcolm Charles, a portfolio manager at Investec Asset Management.
Meanwhile, Spain's borrowing costs leapt in a major bond market test as Madrid prepared to unveil the price of a banking rescue that has stoked fears of a full-blown bailout, according to Dow Jones Newswires.