The rand remained firmer at noon on Tuesday as markets looked to the US Federal Reserve chairman Ben Bernanke’s congressional hearing later today for some signs of further monetary easing.
At 11:54 the rand was bid at R8.1898 to the dollar from its previous close of R8.2027 and Friday’s close of R8.2551. It was bid at R10.0639 to the euro from its previous close of R10.0640 and at R12.8020 against sterling from R12.8193 before.
The euro was bid at US$1.2296 from its previous close of $1.2266 and Friday’s close of $1.2249.
“The markets are unfortunately trading on hopes‚ not on fact‚” said Mark Kalkwarf‚ senior portfolio manager at Iquad Group. “We had on Monday another round of economic data‚ including the US retail sales‚ which was rand negative‚ but the rand sort of shrugged that off.”
Bernanke’s testimony is expected to shed light on his outlook on the economy and monetary policy.
Meanwhile‚ the rand is forecast to average R8.60 against the dollar in the fourth quarter 2012‚ largely due to a weaker euro against the dollar according to Standard Bank.
“Our forecast for the rand is considerably more bearish than consensus and is for moderate underperformance against the trajectory priced into the forwards. The difference between our views and consensus on the rand is‚ to a large extent‚ attributable to our out-of-consensus call on the euro dollar leg with our forecast at US$1.15 per euro over three months versus the consensus forecast of $1.25‚” the bank’s analysts said. - I-Net Bridge