Rand steady at weaker levels
June 19, 2009
By Jacqueline Mackenzie
Johannesburg - The rand was steady at Thursday's weaker levels in quiet early trade on Friday with little in the way of data due today to offer direction.
The rand weakened Thursday after a worse than expected local current account deficit was recorded in the first quarter and on the back of dollar firmness.
At 8.45am the rand was bid at R8.1349 to the dollar from an overnight close of R8.1625. It was bid at R11.3306 to the euro from a previous R11.3500 and at R13.3049 to the pound from R13.3180. The euro was bid at $1.3920 from $1.3906 overnight.
RMB analyst John Cairns said in his daily report that the surprisingly large 7% current account deficit recorded in 1Q09, combined with some mild USD strength, was enough to push USD/ZAR to 8.15 and a close above the technical 8.12/14 resistance level.
"Technically the market is now open to further upside moves. But with secondary data out of the US being slightly positive and equities and commodities consequently breaking their losing streak, there seems little impetus to even push to, never mind break, resistance at 8.23/24.
"This is all the more given that our compatriot currencies traded sideways to slightly stronger yesterday," he said.
In a day with absolutely nothing in the way of scheduled event risk, expect range-bound trade at a higher level.
He expects a range of 8.05 - 8.18 for the day with risks actually slightly to the downside despite the technical break yesterday.
Dow Jones Newswires reported that the euro is slightly higher against the dollar, yen and pound on Friday as markets see a slight up-tick in willingness to build exposure to risk.
Dealers said the major currency pairs are showing some flows into risk exposure after surprisingly strong US economic news raised hopes that recovery may be taking root in America.
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