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Rand strengthens‚ eyes fiscal cliff

The rand continued its strong run on Friday morning as currency traders eye the US fiscal cliff and the African National Congress (ANC) conference in Mangaung.

“It appears that rand participants remain reluctant to commit prior to the ANC elective conference‚ which kicks of this weekend and concludes on December 20‚” Absa Capital said.

Graphic: Renjith Krishnan.

“Global impetus also remains scant now that the (US Federal Open Market Committee) meeting is out of the way‚ with participants also seemingly adopting the safety of the sidelines until there is more clarity on the fiscal cliff front‚” the bank said.

At 8.42am‚ the rand was bid at R8.6436 to the US dollar from Thursday’s close of R8.6521. The local currency was bid at R11.3260 to the euro from its previous close of R11.3094 and at R13.9373 against sterling from R13.9328 before.

The euro was bid at $1.3104 from Thursday’s close of $1.3076.

RMB said in a note: “Whatever happens the rand will still end the year weaker than where it started (at slightly over 8.00) and where we had initially expected.

“The global backdrop proved surprisingly positive‚ the occasional bouts of eurozone stress being outweighed by ongoing monetary easing and the resulting flood of cash into emerging markets.” - I-Net Bridge

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