Rand Gains for a Fourth Day
The South African rand gained against the U.S. dollar for the fourth day today as the stock markets throughout the world were stimulated by the Federal Reserve’s decision to pump about $200 billion into the global banking system.
The rand grew not only against the U.S. dollar, but most significantly against the low-yielding Asian currencies, as the investors favored high-risks assets after the stock market rally.
The Fed’s action really helped the high-risk assets, including the currencies with the high interest gain and the low economy stability. The South African rand greatly benefits from this market sentiment.
The Federal Reserve has stated that it will hold auctions of Treasuries in exchange for the debt papers, including the recently bashed AAA rated mortgage securities, that are widely sold by the banks. The Fed’s statement was a part of the conjoined effort of the European and Canadian central banks to stimulate economy.
The USD/ZAR rate lost about 0.3% today as it went down from 7.8041 to 7.7808 on Forex after it lost more than 2.7% yesterday.
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