More than 70% of economists surveyed had expected a cut as FOMC communication since early May had primed the market to expect some tapering in September.
"It just goes to show that central bankers do not like to be labelled boring‚ so every now and again they upset the apple cart‚ just to make sure that markets do not run ahead of themselves‚" a local trader said.
In morning trade, the rand was bid at R9.5764 to the dollar - compared with R9.8092 at 6pm on Wednesday (18 September) and Wednesday's close of R9.5769. On 28 August it touched its worst level since December 2008 at R10.5084.
Against the euro‚ the rand was bid at R12.9567 from its previous close of R12.9401 and a worst level of R14.0609 on 28 August.
The rand was at R15.4390 against sterling from R15.4433 at its previous close.
The euro was bid at US$1.3535 compared with $1.3509 at Wednesday's close and US$1.3356 at Tuesday's close.
"The Fed caught rand bears offside by postponing the taper‚ providing another leg for rand strength‚" Absa Research said in its morning report.
"The Fed was widely expected to start the taper last night and‚ given the extent to which high-yielding and large-deficit emerging-market currencies have weakened since (Fed chairman Ben) Bernanke's hawkish remarks in May‚ it was hardly surprising the rand strengthened so sharply in the wake of last night's meeting‚" the bank said.
"We expect rand bulls to consolidate last night's strength over the coming days and in all likelihood the rand could recover even further over the coming weeks‚ especially considering that our US economists now expect the Fed to start tapering from December‚ and given that valuations and market positioning have become stretched in recent months‚" the unit said.
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