THE rand was steady at midday yesterday, with investors reluctant to commit to any new positions ahead of a key policy announcement from the European Central Bank (ECB) later this afternoon.
Russia’s ruble which on Wednesday strengthened more than 1% against the dollar on hopes of a ceasefire with Ukraine also flatted at noon, as attention shifted on ECB governor Mario Draghi and whether he would unveil fresh stimulus measures to boost Europe’s ailing economy.
“Today our attention is firmly on the ECB with Draghi having to contend with a sluggish economy suffering signs of deflation,” Standard Bank noted, referencing consumer inflation in the 18-member block nation which stands at 0,3% — the lowest level since 2009.
Markets are divided as to whether the ECB will introduce quantitative easing to spur economic activity in the region or delay action to assess the effect of measures announced in June, when the bank lowered its key refinancing rate to a historic low of 0,15% and cut its deposit rate to -0,1%.
Negative deposit rates means banks are charged for keeping funds at the central bank encouraging them to lend to consumers to buoy consumption.
“My personal view is that we may get more rhetoric this time around as Draghi buys more time before his hand is forced later on,” Standard Bank trader Maemo Rametse noted.
At 11:45am, the rand was at R10,6642 against the dollar from Tuesday’s close of R10,6710.
Against the euro, the rand was at R14,0158 from a close of R14,0359 and was at R17,5449 against the pound from R17,5661 on Wednesday.
The euro was at $1,3148 to the dollar from a close of $1,3151.
The Bank of England is also expected to announce its interest rate decision later where rates are expected to remain on hold at 0,5%.