* Rand need to break through 8.06 to firmer levels
* Bonds hit fresh records
JOHANNESBURG, July 5 (Reuters) – The rand was slightly
firmer within a recent range on Thursday, reacting to
international central banks lowering interest rates and pumping
more money into markets to try and boost growth.
China and the European Central Bank all cut interest rates
earlier in the session and the Bank of England also announced a
third round of monetary stimulus, money that analysts say will
likely end up on emerging markets’ shores.
Yields on government bonds hit record lows with offshore
money continuing to buy local higher-yielding debt.
The rand reversed earlier losses to strengthen 0.7
percent against the dollar after the monetary policy action but
by 1523 GMT had eased to 0.13 percent worth of gains at
8.1253/dollar.
“Although the ECB cut rates and PBoC made a similar move,
the fact that sentiments quickly faded showed that policy easing
won’t solve underlying and structural problems in the Eurozone
and that the global economy is indeed in need of help,” said
Anisha Arora, emerging market analyst at 4Cast.
“Consequently dollar/rand is unlikely to see this week’s low
of 8.06 again, though this is dependant on the outcome of the
United States NFP’s,” said Anisha Arora of 4Cast, warning that
expectations may bee too optimistic for the U.S. jobs number on
Friday.
The rand is usually the most sensitive out its emerging
market currency peers to global risk sentiment as a deeply
liquid market.
Continued…
