The rand was trading softer at noon on Friday due to local mining riot contagion fears and also on the back of a stronger greenback.
“We are seeing rand selling and the rand will continue to weaken for the rest of the day. Locally there is negative follow through from the Lonmin riots and its potential contagion effect. This is weighing on the rand. We see the rand trading between R8.35 to R8.48 to the dollar today‚” said Duncan Howes‚ currency trader at Absa Capital.
At 12.02pm local time the rand was trading at R8.3911 to the dollar from R8.3186 at Thursday’s close and Wednesday’s close of R8.2261. It was trading at R10.5095 to the euro from its previous close of R10.4435 and at R13.2870 against sterling from R13.1825 before.
The euro was bid at US$1.2533 from $1.2558 at Thursday’s close.
Absa Capital said in a note on Friday that Wednesday night’s dovish FOMC minutes‚ when combined with the suggestions that Spain could receive more financial aid‚ had ensured that the euro/dollar had moved higher.
“The rand weakened against the dollar and the euro yesterday but we believe this provides good opportunities to go short euro/rand‚ with a target of 10.10/euro. There is no local data scheduled for release‚ but if we see another upside surprise in this afternoon’s US durable good order then expectations of another round of quantitative easing from the Fed is likely to fade‚ which should bring about broad-based dollar strength and‚ in turn‚ cause the rand to lose ground against the dollar but strengthen against the euro‚” the bank said. - I-Net Bridge