Rand weakens on stronger dollar
November 20, 2009
By Gareth Vorster
The rand softened in the afternoon session on Friday, trading at its weakest levels of the day amid a stronger dollar particularly against the euro, according to a local trader said.
At 3.25pm the rand was bid at R7.5767/$ from R7.5222/$ at its previous close.
It was bid at R11.2264/ from its previous close of R11.2325/ and was at R12.5020/£ from R12.5395/£.
The euro was bid at $1.4817 from $1.4914 overnight.
A local currency trader said: "The rand has weakened since about midday, with dollar strength against the euro the main driver.
"We saw targets on the topside at R7.62 against the dollar. If this rand weakness continues, the next level is at R7.69.
"Over the short term we see rand weakness," the trader said.
Dow Jones Newswires reported that with low risk appetite prevailing in global markets, the dollar and the yen were higher in Europe on Friday.
The euro was the main loser as Japan admitted that its economy was sliding back into deflation for the first time in three years.
This gloom about the global recovery, which has been hanging over markets for the last day or two, is unlikely to be dispelled in the near term given the lack of new economic data.
US President Barack Obama and Treasury Secretary Timothy Geithner only made matters worse with their warnings that a double dip recession remains a risk for the US if the fiscal deficit isn't resolved.
Although the Organisation for Economic Coordination and Development raised its forecast for global growth next year to 1.9% from 0.7%, global equity markets remained in decline.
However, in Europe, major bourses were heading a little higher at the start on reports of options expiry and some bargain hunting.
Analysts suggested that losses earlier in the week may also have been overdone.
Later in the day, the focus will be on a speech by European Central Bank President Jean-Claude Trichet for any comments he might make on the recent weakness of the dollar, suggesting that a strong dollar is in everyone's interests.
|
|
