Rand dips amid signs of consolidation
The rand edged lower on Thursday morning, showing signs of consolidation after gaining sharply against the dollar following the conclusion of the US Federal Reserve’s policy meeting.
As widely anticipated, the Fed raised interest rates by 25 basis points on Wednesday night, but signalled that it would increase rates in a gradual and measured way.
Inflation was still missing its target despite the tightening labour market and strengthening US economy.
As a result, the dollar sagged against a basket of currencies, allowing the rand to rally through R13.50/$.
"The strengthening trend in the rand has been re-established after yesterday’s surge," Rand Merchant Bank currency strategist John Cairns said. "The question is whether this will now continue."
He added that caution could limit the rand’s advance in the run-up to the ANC elective conference at the weekend.
Markets will keep tabs on the European Central Bank (ECB) and Bank of England (BoE), which conclude their monetary policy meetings later in the day.
At 9.45am, the rand was at R13.5146 to the dollar from R13.4549‚ at R15.9703 to the euro from R15.9142, and at R18.1420 to the pound from R18.0468
The euro was at $1.1816 from $1.1827.