Rand stays firm in morning trade

The rand was firm in early trade on Monday (22 July) due to a softer dollar. "We and most other currencies are stronger against the dollar. We need to end below R9.78 before we can say we are establishing a new range‚" a local foreign exchange trader said.

By Helmo Preuss

22 Jul 2013

In early trade on Monday (22 July) the rand was bid at R9.8034 to the dollar from Friday's ((19 July) close of R9.8526 and Thursday's (18 July) close of R9.9220.

The local currency was bid at R12.8972 to the euro from its previous close of R12.9552 and was at R14.9750 against sterling from R15.0587 at its previous close.

The euro was bid at US$1.3152 from US$1.3146 at Friday's close and US$1.3110 at Thursday's close.

Absa Capital said in its morning report that although the rand weakened slightly in the wake of last Thursday's monetary policy committee meeting‚ it finished stronger on the week after US Federal Reserve chairman Ben Bernanke signalled that there was no urgent need for the Fed to scale back its quantitative easing measures.

"The South African Reserve Bank's downwardly revised its 2013 gross domestic product forecast to 2.0%. (This) together with the fact that the governor refrained from referring to the rand as undervalued (a phase that has been repeated by a number of officials in recent months) could have encouraged rand bears following the monetary policy committee.

"We also suspect that some rand bulls were expecting a more hawkish (policy committee) statement last week‚ especially considering that a number of emerging market central banks have already begun tightening monetary policy in recent months‚" Absa added.

Source: I-Net Bridge

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