Rand steadies as markets shrug off Fed hold and Vatican smoke signals
Following a temporary dip due to geopolitical tensions, the rand has rebounded, showcasing resilience against the dollar as markets digest the Fed's latest decisions
Image: Picture: Henk Kruger/Independent Newspapers
After Wednesday's wobble in the local currency, mostly the result of a fire fight between India and Pakistan, the rand reversed its losses, instead moving back to a position where it continues to gain ground against the dollar.
This stabilisation comes despite the US' Federal Reserve holding interest rates steady, which seems to have been priced into valuations across markets even though the States' central bank may have scope to cut interest rates.
Between its New York close and mid-morning on Wednesday, the local currency had dropped some 20c after having traded at the R18.15 level in New York on Tuesday night. On Thursday, however, the currency was increasing in strength, wand was in the R18.16 range – its lowest level in a month – just after lunch.
Bianca Botes, Director at Citadel Global, stated that, although risk sentiment remains mixed, the rand opened steady at R18.22 on Thursday morning.
Nolan Wapenaar, co-chief investment officer at Anchor Capital, said the last 24 hours were a non-event.
'Black smoke in the Vatican and a Fed hold were very broadly anticipated. The silence in conclave and as expected Fed commentary mean that we are business as usual,' said Wapenaar.
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