The rand was trading stronger at noon on Tuesday mainly on the back of a stronger euro and‚ to a lesser extent‚ due to a good local gross domestic product print.
“The rand is stronger because the euro is stronger ... we follow what the euro does. There are still problems at the local mines and that is why the rand is staying at these weaker levels‚” said Mark Kalkwarf‚ senior portfolio manager at the Iquad Group in Johannesburg.
At 12.24pm local time on Tuesday the rand was bid at R8.3952 to the dollar from R8.4381 at Monday’s close. It was bid at R10.5368 to the euro from its previous close of R10.5492 and at R13.2543 against sterling from R13.3227 before.
The euro was bid at US$1.2554 from $1.2502 at Monday’s close.
“This morning we saw half decent deposit figures out of Greece‚ with consumers there having deposited 2% more money into Greek banks in July. This shows a bit of confidence creeping back into Greece and is good for sentiment in the eurozone. The euro showed some good gains on the back of this news. When the euro strengthens the dollar weakens and people will invest into more risky assets such as the rand‚” added Kalkwarf.
“The good GDP figure of 3.2% in the second quarter assisted the rand‚ but it had already moved higher before the release of the GDP figure. Local data has a minor affect on the rand‚ because it is all about funding and liquidity coming into our markets from overseas with foreigners manipulating the local currency market‚” he added. - I-Net Bridge