Rand mildly firmer in dull trade

"There is nothing to move the market this morning‚ as the threat of strikes has been priced in‚ while with London out‚ there is no incentive to take new positions‚" a local foreign exchange trader said.

At 8am‚ the rand was bid at R10.2321 to the dollar from Friday's (23 August) close of R10.2469 and Thursday's (22 August) close of R10.2614.

Against the euro‚ the rand was bid at R13.6934 from its previous close of R13.7107 and was at R15.9300 against sterling from R15.9492 at its previous close.

The euro was bid at US$1.3383 from US$1.3378 at Friday's close and US$1.3360 at Thursday's close.

"This week is expected to start slowly but‚ thereafter‚ we expect renewed rand weakness‚" Absa Capital said in its morning report.

"The rand recovered all the way back to R10.16 per dollar on Friday‚ which was in keeping with a number of emerging-market (EM) currencies that benefited in unison from Thursday's interventionist announcement out of Brazil‚" the bank said.

"We are not convinced that these interventionist measures‚ which have now been introduced by a number of EM central banks in recent months‚ will bring about a sustained improvement in their respective currencies because they are likely to be outweighed by the growing flight to quality resulting from expectations of the Feds tapering of quantitative easing.

"However‚ even if EM central banks do manage to stem the rate of depreciation‚ we think South African authorities are unlikely to follow suit in trying to defend an exchange rate level‚ which could make the rand that much more vulnerable to market forces.

"A slow start to the week is also likely due to today's UK bank holiday. But with intensifying domestic industrial action and the risk that this week's US data could heighten Fed tapering expectations further‚ we believe that Friday's pullback provides a good opportunity for importers to cover forward at current levels‚" the bank said.