Graphic: renjith krishnan

The rand remained firmer against the dollar in late afternoon trade on Thursday, as it tracked a euro that had rallied on strong business confidence data out of Germany.

“The rand is waiting to see if the euro is going to fall over or keep its gains,” a local currency trader said.

“Local bonds have been selling off and this will stop the rand from strengthening,” he added.

He said the release of local PPI data had had no impact on the rand.

At 15:39 local time, the rand was bid at R7.6860 to the dollar from its previous close of R7.7226. It was bid at R10.2121 to the euro from R10.2318 before, and at R12.0655 against sterling from R12.0926 previously.

The euro was bid at US$1.3291 from its previous close of US$1.3255.

Statistics SA said SA's PPI registered growth of 8.9% year on year (y/y) in January from 9.8% y/y in December and 10.1% y/y in November.

The average annual change for 2011 was 8.4% compared with 6.0% in 2010. The PPI, on a monthly basis, was 0.3% after decreasing slightly between November and December 2011.

The PPI was expected to clock in at 9.5% y/y in January, a survey by I-Net Bridge found. Forecasts among five leading economists surveyed ranged from 8.8% y/y to 9.6% y/y.

Meanwhile Dow Jones Newswires reported that the euro rose in European hours on Thursday to its highest level against the dollar since early December as strong German business confidence data helped to buoy investor confidence in the wobbly global economy, even as crude oil prices hit new nine-month highs.

The euro traded as high as $1.3342 against the dollar, its strongest level since December 12, after the Ifo Institute's closely-watched business survey showed a bigger-than-expected improvement in February, suggesting Europe's largest economy would soon overcome a recent slowdown in activity. The euro rose against other currencies too. - I-Net Bridge