Rand flat in dull trade

"There is nothing to move the market this morning‚" a local foreign exchange trader said.

At 8am‚ the rand was bid at R10.2599 to the dollar from Thursday's (22 August) close of R10.2614 and Wednesday's (21 August) close of R10.3723.

Against the euro‚ the rand was bid at R13.6863 from its previous close of R13.7037 and was at R15.9825 against sterling from R15.9901 at its previous close.

The euro was bid at US$1.3342 from US$1.3360 at Thursday's close and US$1.3345 at Wednesday's close.

Absa Capital said in its morning report that the rand was expected to move sideways into the UK long weekend.

"After weakening to a fresh four-year low of R10.44 to the dollar overnight in response to Wednesday (21 August) evening's hawkish (US Federal Reserve) minutes‚ the rand recovered during the Thursday (22 August) session following the release of some encouraging Chinese purchasing managers index data‚" the banks said.

"The upbeat manufacturing data provided a boost for commodity prices‚ which‚ together with a slightly weaker US dollar environment‚ ensured that the rand benefited from some swift short-covering back down to R10.27.

"Watching other emerging markets‚ Brazil's central bank announced a significant intervention to contain Brazilian real weakness. The bank announced US$3bn of weekly foreign exchange interventions (US$500m a day of derivatives from Monday to Thursday and a US$1bn FX credit line each Friday) in support of the currency and its intention to maintain the programme until year-end.

"The real has lost 16.7% of against the US dollar over the past three months‚ about double the rand's deterioration over the same period. We do not expect the South African Reserve Bank to consider similar foreign exchange market policies in SA‚" the bank said.