By Palesa Motloung
The South African rand gained momentum in late afternoon trade on Thursday supported by commodity prices, with a trader noting that technically there was potential to strengthen further.
At 3.45pm the rand was bid at R7.5653/$ from R7.6090/$ at its previous close. It was bid at R11.2835/€ from its previous close of R11.3235/€ and was at R12.5685/£ from R12.6050/£.
The euro was bid at $1.4914 from $1.4876 overnight.
"We have picked up a bit. The rand is incredibly strong even against the euro and pound," the trader said.
"We need to get below this 7.55 level. If we get below that we can go to 7.45. The euro has bounced a little bit against the dollar. It's not just a weaker dollar, but it's also rand strength.
"Commodity prices are supporting. It's a little bit of a mystery as to why we are the levels we are at - possibly the rand gave too much up. But technically, we can go to about 7.40-7.45," he said.
Dow Jones Newswires reports that the dollar is marginally higher against the euro and down slightly versus the yen early on Thursday, with the currency market so far registering only limited response to Thursday's policy decisions by the Bank of England and the European Central Bank.
The UK pound has had the most pronounced movement so far on Thursday, strengthening in the wake of the Bank of England's decision to provide more support to the UK economy amid some mixed recent signals about the progress of economic recovery.
The central bank's Monetary Policy Committee decided to invest in even more insurance against a prolonged slump, expanding its bond buying programme by another GBP25 billion.
In response, the pound initially moved higher on relief that the extension wasn't even larger, reaching an intraday high at $1.6636 before parings its gains somewhat.
The BOE as expected left its key interest rate unchanged at 0.5%, as did the European Central Bank with its decision to hold its key rate at 1.0%.
Currency players are now focused on a follow-up press conference from ECB President Jean-Claude Trichet as well as Friday's US October non-farm payrolls report, amid a still skittish environment that is inhibiting traders from moving too aggressively into higher-yielding currencies and riskier assets, despite the initial negative moves against the dollar following Wednesday's dovish Federal Reserve policy decision.
