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Rand strengthens after Bank of Japan's announcement

Rand strengthens after Bank of Japan's announcement

Date: 2013-04-18
The Rand benefited during the start of the week from the Bank of Japan's commitment to quantitive easing.

The Rand started trading at 13.95 against the Great British Pound, 11.82 against the Euroand it was close to four-week highs against the US dollar.

The Rand benefited during the start of the week from the Bank of Japan's commitment toquantitive easing. This decision contributed to a surge in global liquidity which saw investorssearching for high-yielding emerging market assets. According to ABSA capital "We haveseen foreigners buying some R13bn ($1.5bn) worth of South Africa bonds over the past 20days and so long as this trend persists, rand bulls may remain in the ascendancy."

The Rand however remains a volatile currency and its rally came to an end mid-week.According to John Cairns of Rand Merchant Bank "The risk rally is running out of steam.Dollar/rand and Euro/rand may manage to tick down slightly but are now due a period ofconsolidation, waiting for direction from offshore."

Profit taking and a weaker Euro caused to Rand to end the week at 13.68 against the GreatBritish Pound and at 11.73 against the Euro.

South African Retail sales figures are due to be released later this week and it couldinfluence the movement of the Rand during the coming week.