Go with the flow

RMB AM and Business Day report that the rand was stronger against major currencies in late afternoon trade yesterday in a flow-driven market.

However, currency traders expected it to remain range bound ahead of the US Federal Open Market Committee decision on interest rates due this evening.

In late afternoon, the rand was quoted at R6,487 to the dollar from R6,543 on Friday.

It was quoted at R7,870 to the euro from a previous R7,967 and at R11,571 against sterling from Friday's R11,719.

There have been alot of export orders and the rand is firmer just on the back of that, a currency trader said.

However, he expected the rand's gains to be capped at R6,45 as the market awaited the interest rate decision in the US. It should find support at R6,55 on top of its range.

The dollar rose yesterday as markets braced for a Federal Reserve policy meeting this week that is widely expected to raise the Federal funds rate, making the dollar more attractive to overseas investors.

Economists generally expect the monetary policy setting Federal Open Market Committee to raise the key official US interest rate by a quarter percentage point to 1,75% today.