Graphic: renjith krishnan

The rand depreciated against major currencies during the early session on Thursday‚ as global markets weakened after US Federal Reserve minutes showed stimulus measures were not imminent and would occur only if US economic conditions worsened.

At 08:46 the rand was bid at R8.3150 to the dollar from its previous close of R8.2371. It was bid at R10.1649 to the euro from its previous close of R10.0796 and at R12.8741 against sterling from R12.7697 before.

The euro was bid at US$1.2232 from its previous close of $1.2244.

In its morning report‚ Absa Capital said the rand lost ground on Wednesday‚ after the US Federal Open market Committee (FOMC) minutes failed to signal there was an urgent need for another tranche of quantitative easing.

Absa Capital said risk appetite was still waning due to the release of disappointing Australian employment data.

“Markets are expected to mark time ahead of tomorrow morning’s Chinese GDP data‚ but given that the dollar is on the front foot and commodity prices are slipping‚ we believe the risk is for a weaker rand environment this morning‚” Absa said.

Absa warned that if today’s local manufacturing production data proved disappointing‚ the rand could be hindered from an overall GDP perspective.

A local trader said: “The rand is weaker on the back of the FOMC minutes yesterday‚ which affected the markets. There are also concerns about the growth prospects of China and the euro is still under pressure. These are all negatively affecting the rand. We expect it to reach 8.35‚” a local trader said.

Meanwhile‚ Dow Jones Newswires reported that Spain was biting down hard on the bullet‚ with Prime Minister Mariano Rajoy announcing new belt-tightening measures designed to help the struggling nation meet the recently relaxed budget-deficit targets.

The European Commission immediately welcomed the moves‚ which would total about $80bn over the next two years‚ and despite the apparent delays in German courts over the European Stability Mechanism‚ the measures out of Madrid bought more breathing room. - I-Net Bridge