The rand was softer in early trade on Thursday on the back of a weaker euro.
“We are just following the euro at the moment as Europe is in the summer holiday doldrums with little to move the market‚” a local trader said.
At 8.35am local time the rand was bid at R8.2467 to the dollar from Wednesday’s close of R8.2140. It was bid at R10.1121 to the euro from its previous close of R10.0884 and at R12.9001 against sterling from R12.8809 before.
The euro was bid at US$1.2268 from $1.2281.
Absa Capital said in their morning report that the rand continued to drift weaker on Wednesday‚ which meant the local unit has now depreciated for three successive trading sessions after once again failing to break below 8.05 per dollar last Friday.
“Yesterday’s US data was mixed. On one hand‚ the country’s soft inflation and weak manufacturing data kept the door open for more Fed easing‚ which could be supportive of risky assets. On the other hand‚ yesterday’s encouraging US housing data‚ together with Tuesday’s encouraging retail sales data‚ implied there may still not be an urgent need for another round of quantitative easing (our base case scenario). However‚ while yesterday’s US data sent conflicting messages for the ZAR‚ this morning’s announcement s from Chinese Premier Wen Jiabao that there was scope for further monetary easing in the wake of this morning’s disappointing Chinese FDI figures should ensure that the rand enjoys some short covering‚ from yesterday’s 8.24 per dollar levels. - I-Net Bridge