Rand weakens as Fed excitement wanes

The rand was weaker on Friday (20 September) after making good gains following the US Federal Reserve's announcement on that it will prolong its quantitative easing programme at its current levels.

By Madeleine van Niekerk

20 Sep 2013

Image courtesy of thanunkorn / FreeDigitalPhotos.net

On Friday‚ the rand was bid at R9.7723 to the dollar‚ compared with R9.6830 at Thursday's close. Against the euro‚ the rand was bid at R13.2187 from its previous close of R13.1039 and at R15.6614 against sterling from R15.5578 at its previous close.

The euro was bid at US$1.3535 compared with US$1.3528 at Thursday's close.

"We saw excellent importer demand on Thursday and it is difficult to make a call on the rand after the Fed surprise. The US central bank will eventually have to taper its monetary-easing programme‚" a local trader said.

"The local currency's weakness is not due to rand-specific news but is driven by emerging-market currency performance‚" the trader said.

"It is a holiday in Japan on Monday (23 September) and a holiday in SA on Tuesday (24 September)‚ so more subdued trade is expected‚" he said.