S.Africa's rand firms away from 2-1/2 mth lows
JOHANNESBURG (Reuters) - South Africa's rand firmed against the dollar on Thursday after dovish comments from a U.S. Federal Reserve official on the possibility of further monetary easing in the world's top economy put pressure on the greenback.
The rand was up more than half a percent against the U.S dollar at 0614 GMT, trading at 7.9515 against the dollar from Wednesday's New York close of 8.005.
The European central bank also hinted at the possibility of more bond-buying, but an upcoming Italian debt sale posed more risks to jittery markets.
"We must bear in mind that the interest rates scenarios globally are still pretty much in play, low interest rates probably still will remain in places like U.S and Europe," said Ion de Vleeschauwer, a trader at Bidvest Bank.
Ultra-loose monetary policy to stimulate the economies of the developed world has often played in favour of the rand, given the wide interest rate differentials.
The Federal Reserve's No.2 official, Janet Yellen, said on Wednesday an ultra-easy monetary policy is appropriate given high unemployment and the headwinds facing the U.S. economy, and she left the door open to further action if needed.
Dealers will watch closely a planned auction on Thursday in Italy to gauge sentiment in the fixed income market.
Italian bonds have been dragged in the mud by last week's Spanish auction that showed investors concern over Europe ability to repay its debts, three-year Italian borrowing costs are set to jump by a full percentage point from a month ago.
South African government bonds were little changed, with the yield on the 2015 issue falling 1.5 basis points to 6.745 percent and that on the 2026 issue down by half a basis point to 8.49 percent.
On the bourse, the JSE's blue-chip Top-40 March futures contract was up 0.12 percent before the 0700 GMT start of trade, pointing to a positive start.
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