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Rand firms as currency pressures ease

9 Sep 2013

The rand firmed to stronger than R10 to the dollar at midday on Monday (9 September)‚ extending gains from Friday (6 September) when a disappointing US non-farm payrolls reduced pressure on emerging market currencies.

"It's a continuation from the moves we saw on Friday. Emerging market pressures have eased at the moment and that's why the rand is stabilising‚" a local currency trader said.

In morning trade the rand was bid at R9.9786 to the dollar compared with Friday's close of R10.0023 and Thursday's close of R10.1938.

Against the euro‚ the rand was bid at R13.1610 from its previous close of R13.1948. The rand was bid at R15.6321 against sterling from R15.6294 at its previous close.

The euro was bid at US$1.3191 compared with US$1.3179 at Friday's close and $1.3120 at Thursday's close.

RMB noted that emerging-market currencies‚ including the rand‚ had "reached the edge of the cliff last week‚ but stepped away from the brink".

"However‚ better emerging-market data and some tapering relief has resulted in all the main currencies backing well away from their worst"‚ the bank said.

"As a result‚ some are now going as far as saying that this mini-emerging market crisis is already over. This seems premature to us‚ but conditions are certainly much calmer‚" it said.

Most market analysts believe that the tapering of US monetary stimulus‚ which was expected to start this month‚ will be delayed as a result of the slightly disappointing payroll data.

Source: I-Net Bridge

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