The rand was little changed from Friday’s close in quiet midday trade on Monday as the Queen’s Diamond Jubilee celebrations on Monday and Tuesday meant that SA traders could take a breather after a volatile week last week.
“Today has been very quiet compared with Friday when we moved from 8.48 to 8.70 and back again‚” a local trader said.
At 11:35 the rand was bid at R8.5603 to the dollar from Friday’s close of R8.5721 and Thursday’s close of 8.5006.
It was bid at R10.6365 to the euro from Friday’s close of R10.6705 and Thursday’s close of R10.5131 and at R13.1525 against sterling from R13.1904 at Friday’s close and R13.0997 at Thursday’s close.
The euro was bid at US$1.2426 from Friday’s close of $1.2418 and Thursday’s close of $1.2364.
RMB said Friday’s terrible US employment data kept pressure on the rand to weaken‚ but not as much against the crosses as against the US dollar.
“The US non-farm payrolls employment figures confirmed that the world’s largest economy is struggling again. Not only was May’s job creation a miserly 69‚000 but both March and April’s figures were revised down significantly. Gone is the optimism at the start of the year when almost 300‚000 jobs were created per month. And with European and Chinese data also disappointing‚ the global growth outlook continues to deteriorate‚” said RMB.
“The worsening outlook is clearly rand negative — remember that historically the rand has been strong when the global economy has been strong and vice versa. But the US data has also been terrible for the dollar — and may therefore have broken the one way trend decline in the euro per dollar leg. The market didn’t know which of these two effects should dominate on Friday‚ resulting in the rand’s huge swings late in the afternoon. As time progresses‚ the negatives for the rand will probably dominate‚ with risks that it may already occur today but trade on Friday shows that greater two-way risks are evident on rand/dollar. By contrast‚ the pressure is now greater for rand weakness against the other crosses‚ notably rand euro‚” added RMB. - I-Net Bridge