The rand remained weaker in midday trade‚ tracking the euro which softened on a disappointing statement from the US Federal Reserve on Wednesday night‚ which did not go as far as markets had hoped with regard to stimulus measures.
The Fed also revised down its economic growth forecasts for the US from 2.4%–2.9% at the previous FOMC meeting to 1.9%–2.4%.
The SARB quarterly bulletin which analysts had predicated would gauge the sluggishness in the demand side of the economy‚ came out showing contraction for the first quarter of the year‚ but had little impact on the rand‚ according to a trader.
The bulletin showed that the volume of merchandise exports contracted by 0.4% in the first quarter of 2012‚ largely due to relatively weaker global demand and domestic supply constraints.
It noted that the slowdown in industrial production in some of SA's key export markets damped the demand for especially SA-produced mining commodities.
At 11:54 the rand was bid at R8.2408 to the dollar from Wednesday’s close of R8.1984. It was bid at R10.4470 to the euro from its previous close of R10.4102 and at R12.9401 against sterling from R12.8877 before. The euro was bid at US$1.2679 from Wednesdays’s close of $1.2691.
“The rand remains weaker‚ tracking the euro after the dollar became mildly stronger overnight. There is no sign of movement on the local market‚ we’ll continue to be euro driven‚” a local trader said. - I-Net Bridge