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Rand softer‚ shrugs off positive Chinese data

Johannesburg – The rand exhibited a weaker bias across the board in early trade on Friday‚ shrugging off China’s slightly better than expected fourth-quarter growth figures‚ as domestic factors continued to weigh on sentiment.

A 8.51am‚ the rand was bid at R8.8488 to the US dollar from R8.8127 at Thursday’s close. The local currency was bid at R11.8450 to the euro from its previous close of R11.7799 and at R14.1381 against sterling from R14.0782 before.

Graphic: Renjith Krishnan.

The euro was bid at $1.3386 from Thursday’s close of $1.3374.

RMB analysts said in a note all key US and Chinese figures beat expectations and pointed to an underlying economic recovery on both sides of the Pacific.

“This is all rand positive and we should see decent gains‚” they said.

“Moves have been very contained though‚ with US dollar/rand failing to push below 8.76/77 yesterday and euro/rand being left to drift upwards by default.

“Clearly the domestic backdrop‚ which has been the key driver recently‚ is weighing. The failure of the Aussie and Kiwi (the New Zealand dollar) to make new highs will also constrain some enthusiasm‚” the analysts said.

China’s gross domestic product grew 7.9% year on year in the fourth quarter‚ from 7.4% in the preceding quarter. - I-Net Bridge

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