Rand consolidates after US data

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Graphic: Renjith Krishnan.

The rand was slightly stronger against the US dollar on Wednesday afternoon‚ after the US trade deficit narrowed for a second straight month in May.

According to data released on Wednesday‚ the US deficit in international trade of goods and services decreased 3.8% to $48.68 billion from an upwardly revised $50.60 billion the month before. The April trade gap was originally reported as $50.06 billion.

There is the possibility of a further slide as investors now look forward to the FOMC minutes‚ scheduled for release at 18:00 GMT on Wednesday.

At 15:57 the rand was bid at R8.2072 to the dollar from its previous close of R8.2103. It was bid at R10.0677 to the euro from its previous close of R10.0558 and at R12.7689 against sterling from R12.7360 before.

The euro was bid at US$1.2274 from its previous close of $1.2252.

“We have weakened slightly but still within the same levels we have been in the last three days. The focus is now on FOMC minutes to be released later today. Many people are waiting on the sidelines to see what will happen in Europe; there has been some relief though‚ concerning banks‚” a local trader said.

Meanwhile‚ Dow Jones Newswires reported that Spain was biting down hard on the bullet‚ with Prime Minister Mariano Rajoy announcing new belt-tightening measures designed to help the struggling nation meet the recently relaxed budget-deficit targets. The European Commission immediately welcomed the moves‚ which would total about $80 billion over the next two years‚ and despite the apparent delays in German courts over the whole ESM issue‚ the measures out of Madrid had bought more breathing room. - I-Net Bridge


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