Rand firmer ahead of eurozone policy decision
The rand was firmer on Thursday morning as global markets shifted their focus to the European Central Bank’s (ECB’s) monetary policy announcement.
ECB president Mario Draghi is expected to deliver his final policy announcement on Thursday after eight years at the helm. Trading Economics says the consensus is for the eurozone’s deposit facility rate to remain unchanged at -0.5.
Lower interest rates in the eurozone help support SA bonds, as well of those of other emerging markets, as it makes the yield on local bonds relatively more attractive for investors on the hunt for returns.
“A series of stimulating measures have already been taken last month with the announcement of a new asset purchasing programme and cutting of deposit rates. Draghi will instead reiterate his calls on governments to step up with fiscal measures as monetary policy on its own won’t cure the eurozone’s stalling economy,” said FXTM chief market strategist Hussein Sayed.
Markets are also awaiting the EU’s decision regarding a Brexit deadline extension.
At 9.55am, the rand had firmed 0.17% to R16.2731/€, 0.28% to R14.6023/$ and 0.39% to R18.8447/£. The euro had strengthened 0.12% to $1.1144.
Gold was down 0.1% to $1,490.31/oz, while platinum was flat at $920.07. Brent crude lost 0.23% to $60.9 a barrel.