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Rand recovers on calmer global markets

Mar 11 2016 10:21

Johannesburg - The rand regained some ground on Friday as calm returned to global markets following frenetic trade and increased risk aversion triggered by the European Central Bank's suggestion that there would be no further cuts.

Stocks opened higher, with the JSE's Top 40 index up 0.7%.

By 09:01 the rand had gained 0.6% to R15.2800/$, riding the wave of broad market correction and a weaker greenback after threatening to break through the R15.50 mark in overnight trade. It was trading at R15.25 to the dollar shortly after 10:00.

"The market does not like it up here and the assault on 15.00 will likely kick-off in earnest. Exporters are starting to tame their greed and importers are now more settled," said currency trader at Standard Bank Maemo Rametse.

The rand had raced to a two-and-a-half month low of R15.0250 after the ECB slashed interest rates and notched up its stimulus programme on Thursday, but turned sharply as risk sentiment swung when ECB president Mario Draghi's comments at a press conference suggested the bank had reached the end of its rate cut cycle.

With no local data due, traders said the rand would hold steady with direction coming from broader emerging market sentiment.

Government bonds were flat with the bench paper due in 2026 at 9.18% after rallying to a one-month low in the previous session.

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rand  |  markets  |  currencies

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