European summer keeps rand in doldrums

Dealers said the Group of 20 finance ministers and central bankers meeting was likely to produce yet another anodyne communique at the end of the meeting.

"The rand and all other currencies are in the summer doldrums and going nowhere‚ so we expect a range-bound day‚" a local foreign exchange trader said.

At 8.00am on Friday (19 July) the rand was bid at R9.9049 to the dollar from Thursday's (18 July) close of R9.9220.

The local currency was bid at R13.0057 to the euro from its previous close of R13.0135 and was at R15.0739 against sterling from R15.0966 at its previous close.

The euro was bid at $1.3135 from $1.3110 at Thursday's close.

RMB said in its morning report that Thursday's South African Reserve Bank monetary policy announcement was unlikely to materially effect the rand's performance over the short-term.

"The decision to keep the policy rate unchanged was widely expected and the tone of the statement was neutral. We do‚ however‚ agree with the monetary policy committee's underlying concern over the vulnerability of the currency in a global economy when the US Federal Reserve starts to taper its asset purchases.

"As we've highlighted before‚ SA's balance of payments imbalance renders the rand vulnerable to changes in the Fed's monetary policy‚" it said.

"There is little data and news scheduled for release on Friday (19 July) that can move the market significantly. The rand should therefore continue to move in the range around R9.90 per dollar," RMB added.