Johannesburg - The rand lost ground on Thursday following revelations that the third round of US quantitative easing (QE) could end earlier than previously thought.
The minutes of the Federal Open Market Committee (FOMC) meeting suggested that officials are concerned about the dangers of an even bigger balance sheet and that the US Federal Reserve will cut back on open-ended asset purchases.
This could signal an end to the increased levels of liquidity that have benefited global markets and commodity prices.
“The FOMC minutes have placed markets firmly in risk-off mode‚” said Vivienne Taberer a fund manager at Investec Asset Management.
“The rand is not performing too badly compared to some of the Asian currencies. Eastern European markets especially‚ which are more tied to the euro‚ are taking a beating‚” she said.
At 11.33am‚ the rand was bid at R8.9498/$ from Wednesday’s close of R8.9062/$ and Tuesday’s close of R8.8521/$.
The local currency was bid at R11.8040/€ from its previous close of R11.8145/€ and at R13.6258 against sterling from R13.5560 before.
The euro was bid at $1.3191 from $1.3272 at Wednesday’ close and $1.3394 at Tuesday’s close.
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