The rand was slightly stronger in early trade on Tuesday‚ as traders eye SA’s second-quarter (Q2) current account deficit figures and US Federal Reserve chairman Ben Bernanke for direction.
“Despite Monday’s worse than expected Chinese trade data‚ the rand consolidated its post-US payrolls data strength on Monday morning‚ before enjoying an extended period of appreciation in the afternoon session‚” Absa Capital said in its Tuesday morning report.
“The rand bulls continue to take encouragement from the increased likelihood of additional stimulus from the Fed and perhaps even from (China) in the near term following the aforementioned disappointing data out of the US and China‚” it said.
At 8.35am‚ the rand was bid at R8.1721 to the dollar from R8.1867 at Monday’s close. It was bid at R10.4397 to the euro from its previous close of R10.4424 and at R13.0799 against sterling from R13.0807 before.
The euro was bid at US$1.2779 from $1.2761 at Friday’s close.
“We are also expecting a mild improvement in SA's Q2 2012 current account deficit reading today‚ compared with the Q1 2012 figure‚ which could help the rand from an overall balance of payments perspective‚” the bank said.
“This implies that the rand will continue to drift towards the lower realms of its three-month trading range of 8.05-8.55/US dollar and our September 12 end of period forecast of R8.07‚” Absa Capital said. - I-Net Bridge