The South African Rand strengthened against the Pound and broke a key level against the US Dollar after pro monetary stimulus Janet Yellen was nominated to succeed Ben Bernanke as the chairperson of the US Federal Reserve.
US President Barrack Obama revealed his nomination early on Wednesday, immediately giving a boost to the worlds emerging market currencies if successful Yellen will replace Ben Bernanke on January 31st 2014.
“As vice-chairman of the Fed, Yellen has been a big supporter of quantitative easing and is seen as a dove. Risk assets will welcome her nomination as it signals a high likelihood of continued easy US monetary policy,” said John Cairns, currency strategist at Rand Merchant Bank based in Johannesburg.
Currencies such as the Indian Rupee and other emerging currencies were able to post gains against the US Dollar and other major currencies as economists speculate that Yellen if successful in taking the top job she will be in favour of maintaining the Central Bank’s $85 billion monthly stimulus programme. The news increased investor appetite for emerging- market bonds and stocks.
The Rand is likely to weaken as the week progresses however due to expectations that tomorrow’s South African Manufacturing production data will come in weak. Economists are expecting the report to show that manufacturing in Africa’s biggest economy slowed to an annual 1.2% in August, down from the 5.4% recorded in July.
Current South African (ZAR) Exchange Rates:
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The US Dollar/South African Rand Exchange Rate is currently in the region of: 9.9961 >
The Pound Sterling/South African Rand Exchange Rate is currently in the region of: 15.9703 <
The Euro/South African Rand Exchange Rate is currently in the region of: 13.5188 <
The Australian Dollar/South African Rand Exchange Rate is currently in the region of: 9.4418 <
The New Zealand Dollar/South African Rand Exchange Rate is currently in the region of 8.2993 <
The Canadian Dollar/South African Rand Exchange Rate is currently trading in the region of 9.6355 <
(Correct as of 12:40 pm GMT)
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