Rand flirts with R15 vs the dollar

The rand eyed a move back below R15 against the US Dollar in afternoon trade on Thursday, after the European Central bank cut interest rates.

The central bank also announced measures intended to boost the eurozone economy.

The ECB said it will expand its quantitative easing programme from €60 billion to €80 billion a month.

“This means there is more cheap money going around and the risky assets are loving it,” chief currency at Bidvest Bank Ion de Vleeschauwer told Reuters.

By 15h15, the local unit had firmed more than a percent against the dollar to 15.0300, its strongest level since December, and far off its worst ever level of R17.99 as recently as 11 January.

By 15h45, the rand had given back a fraction  – at R15.07 to the US currency. It traded at R21.28 to the pound, and was 2.5% better against the euro at R16.32.

Finance Minister Pravin Gordhan is currently on an international roadshow trying to calm investors over the country’s investment grade rating.

On Tuesday, Moody’s announced a move to place South Africa on review for a possible downgrade.

The ratings agency will visit the country in the next week to make a decision on whether to downgrade its credit status to just one notch above sub-investment grade.

It would join Standard & Poor’s (S&P), and Fitch Group in their current assessment of the country, which is one notch above junk.

Gordhan was in London on Wednesday, and will next visit Boston and New York.

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Rand eyes R15 to the dollar