Rand Rebounds on ECB Efforts

The South African rand strengthened today as the European Central Bank announced it’s planning to lend dollar to the European bank in an effort to support the European banking system and to boost liquidity.

The ECB announced it’s going to perform liquidity operations in tandem with the Federal Reserve, the Bank of England, the Japan of Bank and the Swiss National Bank. The effort of the central banks reduced concerns about the Eurozone banking system. Analysts think that the optimism may be short-live, but for now it bolstered riskier assets, including the rand.

Europe Helps Oil & Russian Ruble

The Russian ruble climbed today, rebounding from the lowest level in eight months against the US dollar, as crude oil gained and the European Central Bank announced its plans to boost liquidity, bolstering risk appetite.

Crude oil jumped 1.4 percent to $90.02 per barrel in New York, rebounding for the previous drop to $88.01 per barrel. Crude is the major source of Russia’s export revenue. Futures on Brent crude oil rose 2.4 percent to $115.06 per barrel in London. Traders trimmed their bets that the ruble will weaken further.

SNB Maintains Rates at Zero, Franc Strengthens

The Swiss franc rose today even after the Swiss National Bank left the benchmark interest rate at zero at pledged to maintain the peg of the nation’s currency to the euro.

The central bank wrote in the monetary policy assessment:

The Swiss National Bank will enforce the minimum exchange rate of CHF 1.20 per euro set on 6 September with the utmost determination. It is prepared to buy foreign currency in unlimited quantities. It continues to aim for a three-month Libor at zero and will maintain total sight deposits at the SNB at significantly above CHF 200 billion.

Mixed Fundamentals Leave Traders Uncertain, USD Fluctuates

The US dollar fluctuated as the mixed fundamental data left Forex traders uncertain will the US economy face recovery or recession. The currency was falling yesterday, but at the start of today’s trading session the dollar rebounded.

There was plenty of good news. The consumer price index rose 0.4 percent in August, compared with the median forecast of 0.2 percent. The current account deficit decreased to $118.0 billion (preliminary) in the second quarter of 2011, from $119.6 billion in the first quarter, instead of widening to $122.0 billion as was expected. Industrial production advanced 0.2 percent in August.

NZD Gains as RBNZ Shows Optimism for New Zealand Economy

The New Zealand dollar jumped today after the Reserve Bank of New Zealand maintained its interest rates yesterday and signaled that the good health of the nation’s economy can lead to higher rates in the future.

The RBNZ held the Official Cash Rate (OCR) unchanged at 2.5 percent yesterday. The central bank explained that “the New Zealand economy has performed relatively well”. Yet the outlook for the global economy, including the markets of the main nation’s trading partners, “has deteriorated markedly”. The RBNZ voiced concern about the strength of the nation’s currency:

Mixed Fundamentals Leave Traders Uncertain, USD Fluctuates

The US dollar fluctuated as the mixed fundamental data left Forex traders uncertain will the US economy face recovery or recession. The currency was falling yesterday, but at the start of today’s trading session the dollar rebounded.

There was plenty of good news. The consumer price index rose 0.4 percent in August, compared with the median forecast of 0.2 percent. The current account deficit decreased to $118.0 billion (preliminary) in the second quarter of 2011, from $119.6 billion in the first quarter, instead of widening to $122.0 billion as was expected. Industrial production advanced 0.2 percent in August.

Rand Falls as Investors Shun South African Bonds

The South African rand dropped today as the optimism about the European banking system quickly waned, spurring investors to draw money out of riskier assets.

The global funds sold $1.4 billion of South African bonds on September 13 and 14. That’s the biggest two-day selling since October 2008. Economists are concerned that the selling can lead to higher current account deficit in South Africa as the current account was finance for the most part by the bonds inflows.