At 11:58 local time the rand was bid at R6.7953/$ from R6.8886/$ at the previous close. It was bid at R9.7042 to the euro from R9.6552 before and at R11.0165/£ from R11.0209/£ at its previous close.
The rand remained fairly strong at noon on Thursday in response to the US Federal Reserve's latest quantitative easing (QE2) efforts, which prompted the dollar to depreciate against the euro.
At 11:58 local time the rand was bid at R6.7953/$ from R6.8886/$ at the previous close. It was bid at R9.7042/€ from R9.6552/€ before and at R11.0165/£ from R11.0209/£ at its previous close.
The euro was bid at $1.4252 from $1.4032 late on Wednesday.
"QE2 is much about lowering interest rates and it is about weakening the dollar," a trader said. The greenback will remain under pressure as the Fed announced plans to pump $600bn into the economy through quantitative easing, the trader said.
RMB analysts agreed, saying that the low interest rate environment in the US remains and so the incentive to sell the US dollar and the financing for carry trades and flows into emerging markets.
"Essentially until US policy turns around, the international environment should remain rand positive. South Africa hasn't seen its share of the flows in the past two months, so the pressure is somewhat disguised.
"Overall, while the Fed decision was more or less as expected, it only amplifies the rand positives. While the ECB's policy decision will be announced mid-afternoon, today is really going to be about how markets absorb last night's announcement," RMB said.
Dow Jones Newswires reported that the dollar fell against the yen and the euro in Asia Thursday, as investors sold the US unit following the Federal Reserve's announcement overnight of a second round of quantitative easing.
The Fed's policy-setting Open Market Committee decided Wednesday to buy $600bn of US Treasurys over the next eight months. While the result was roughly in line with market expectations, limiting the market impact, the move is expected to continue weighing on Treasury yields, keeping downward pressure on the dollar, dealers said.
"As long as US Treasury yields are pressured down, the downward trend for the dollar-yen won't change," said Motonari Ogawa, a senior FX dealer at Barclays Bank.
