The South African rand slumped today after two days of gains on the speculation that the central bank bought dollars to keep the currency from appreciating further after it had reached the highest level in five months in February.
Economists speculated that South Africa’s central bank was buying dollars to prevent the rand from becoming too strong and hurting the nation’s economy. The rand also fell as riskier currencies felt pressure after the US Federal Reserve refrained from quantitative easing. Initially, traders considered it to be a good sign, but today some of them reviewed their attitude and were less optimistic.
USD/ZAR was up from 7.5280 to 7.6550 as of 13:39 GMT today.
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