Rand improves as investors consider implications of Fed cut
The rand was slightly firmer on Wednesday morning as investors mulled over the US Federal Reserve’s (Fed’s) decision to cut interest rates amid fears about the economic damage caused by the coronavirus.
As markets find some support this week amid hope that central banks will move to mitigate the effects of the outbreak, the Fed cut interest rates by 50 basis points on Tuesday. This was the first emergency cut by the Fed since the global financial crisis of 2008. More than 3,000 people have died due to the virus.
“The market response, though emerging-market positive by virtue of a weaker US dollar, calls into question whether the cut was pre-emptive or perhaps a policy mistake similar to late 2008, with the adjustment doing little to relieve the stress of the global financial crisis,” Rand Merchant Bank analyst Nema Ramkhelawan-Bhana said.
At 10.40am, the rand had strengthened 0.42% to R15.3452/$, 0.23% to R17.1559/€ and 0.46% to R19.6266/£. The euro had firmed 0.10% to $1.1181.
Gold was down 0.22% to $1,636.90/oz while platinum was up 0.13% to $877. Brent crude added 1.80% to $52.62 a barrel.
Source: businesslive.co.za
