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Johannesburg - The rand was marginally weaker against major currencies in late trade on Tuesday as it continued to
consolidate amid a retreat in global risk appetite.
At 16:44 the rand was bid at 9.16 to the dollar from an overnight close of 9.0710. It was bid at 12.15 to the euro from a previous 12.1588 and at 13.51 against sterling from 13.3855 before.
The euro was bid at US$1.3271 from $1.3402 overnight.
"The rand is following the euro weaker. But everything is looking more consolidative right now. So we're seeing a bit of profit-taking ahead of the long weekend," a local currency trader said.
RMB analyst John Cairns said there was a lack of data this week and that the rand was looking to trade sideways. He added that whether the 9.00 rand per dollar level is indeed the low for the year is dependent on whether the global equity market rally has legs, the euro and whether the SA Reserve Bank will come into the market to start accumulating reserves.
Data released by the Reserve Bank showed the SARB's dollar-denominated holdings of gold and foreign assets increased by US$329 million to US$34.108 billion in March from US$33.779 billion in February. Net reserves increased by US$307 million to US$33.458 billion.
Cairns noted that the latest reserve figures do not suggest that the SARB entered the market to accumulate reserves.
The increase was completely a reflection of valuation effects associated with a 6.6% rise in euro/dollar during the month - implying the dollar value of euro reserves rose. "Adjusting for this effect we find that there was no reserve accumulation in the month."
"The rand has strengthened significantly over the first week of April with dollar/rand receiving considerable support around the 9.00 level. This may partly reflect SARB accumulation at the level. We await the April reserve figures to indicate the extent, if any, of SARB activity," he said.
The US corporate reporting season starts today and could cause some upsets and so US equity market performance comes back as a key driver for the rest of the week, he added.
Dow Jones Newswires reports that dollar demand is back on a return of financial sector woes Tuesday.
- I-Net Bridge