The rand strengthened to its best level in six weeks against the euro on Thursday morning as investors bet on the likelihood that the European Central Bank (ECB) will put in place stimulus measures.

Markets are expecting the ECB to lower its deposit rate and introduce stimulus efforts. The bank’s meeting on Thursday comes just a week before the US Federal Reserve is expected to announce its decision on interest rates as fears of a global economic slowdown persist.

Stimulus efforts and interest rate cuts in developed markets benefit SA. When there is more money in the global system, the search for higher returns becomes more earnest, with investors prepared to take on a little more risk for those better returns.

By 9.55am, the rand had firmed 0.38% to R16.1035/€, 0.43% to R14.6175/$ and 0.41% to R18.0258/£. The euro was flat at $1.1016.

“It is obvious that the market has highly dovish expectations from [ECB president] Mario Draghi. But high expectations also mean easy disappointment. Hence the euro’s mood will mostly depend on how investors react to a more or less dovish decision at today’s ECB meeting,” London Capital Group senior market analyst Ipek Ozkardeskaya said.

Gold was up 0.41% to $1,502.83/oz and platinum up 0.77% to $951.12. Brent crude was flat at $61.02 a barrel.

Stats SA is scheduled to publish mining production figures for July on Thursday. An expansion of 1% is the consensus, according to a Bloomberg poll, from a contraction of 4.2% in June.