Rand struggles to hold gains

Trading is volatile ahead of the outcome on Wednesday (31 July) of the US Federal Reserve's two-day monetary policy meeting.

"It's interesting because the rand usually doesn't react to US housing data releases but investors seem to be anxious about what (US Federal Reserve chairman) Ben Bernanke will say at the upcoming FOMC meeting‚" a local trader said.

US home sales declined by 0.4% month-on-month‚ seasonally adjusted‚ in June - better than the consensus estimate for a 1% fall.

In morning trade on Tuesday (29 July) the rand was bid at R9.8147 to the dollar from Monday's close of R9.7809.

The local currency was bid at R13.0055 to the euro from its previous close of R12.9691 and was at R15.0442 against sterling from R14.9987 at its previous close.

The euro was bid at US$1.3257 from US$1.3258 at Monday's close.

A dovish statement from the Reserve Bank of Australia's governor added further pressure to the local unit‚ which looked set to resume its weaker bias against its major peers.

"The Reserve Bank of Australia's reference to its resource investment dropping quite heavily as a function of slowing Chinese growth is rand-negative given that China is our biggest export partner‚" he said.

Event risk now turns to the release of local unemployment data for the second quarter and the June fiscal balance‚ expected to be released today (29 July).