Rand stronger on firmer euro

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Graphic: Renjith Krishnan.

The rand was stronger on the back of a firmer euro in early morning trade on Tuesday.

“We are seeing the northern hemisphere summer doldrums‚ so we do not expect any fireworks from the US Federal Reserve tonight‚” a local trader said.

At 08:32 the rand was bid at R8.1881 to the dollar from its previous close of R8.2027 and Friday’s close of R8.2551. It was bid at R10.0565 to the euro from its previous close of R10.0640 and at R12.8022 against sterling from R12.8193 before.

The euro was bid at US$1.2281 from its previous close of $1.2266 and Friday’s close of $1.2249.

Dow Jones Newswires reported that the dollar continued its slide against many other majors on Tuesday in Asia‚ amid gains in the region’s equity markets ahead of the start of closely watched congressional testimony by Federal Reserve chairman Ben Bernanke later in the global day.

Some market participants trimmed positions betting on further gains in the dollar that they had previously built up amid continuing concern over Europe's sovereign debt problems following disappointing US retail sales data on Monday.

Bernanke is scheduled to begin two days of semiannual congressional testimony later in the day. The testimony is expected to shed light on his outlook on the economy and monetary policy. Participants will likely scrutinise his comments for any prospect of additional monetary easing by the US central bank.

Besides Bernanke's testimony‚ the market will also be monitoring the German ZEW indicator of economic sentiment for July and the US consumer price index for June. - I-Net Bridge


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