Johannesburg – The rand was steady in afternoon
trade on Friday, holding up against the dollar,
aided by a stronger
euro.
At
15:24 the rand was bid at R7.5981 to the dollar from R7.5780 at its previous close.
It was bid at R9.3999 to the euro from its previous close of
R9.3691 and was at R11.0592 against sterling from
R11.0379.
The euro was bid at $1.2362 from $1.2345 previously.
A
local trader said: "We are seeing continued rand strength, aided by a firm euro.
The rand has come back down from R8.00 against the dollar over a the
course of a few days."
He
noted that the euros rally started after China refuted speculations that it
was reviewing its euro-hedged assets in Europe due to sovereign debt
crisis.
Dow Jones Newswires reports the euro eked out slight gains against its major
rivals Friday, taking advantage of improved investor sentiment
that bolstered global stock markets.
In
a sign concerns over the eurozone sovereign debt crisis have eased somewhat, the
interest rate banks charge each other for dollar-denominated lending
fell for the first time in three weeks, helping
to allay fears that a
strain in funding conditions will put the global economic
recovery in jeopardy.
Friday morning, the euro was at $1.2364 from $1.2356 late on Thursday, according
to EBS via CQG.
US
consumer spending and personal income data released on Friday had little immediate
impact on major currency pairs.
With the
common currency finding some footing, it could extend its gains toward $1.26 in
the near term, said Brown Brothers Harriman analysts.
But
the euro is not out of the woods, analysts said, as the entrenching recovery
in the US and parts of Asia will continue to outstrip the
slow-growth eurozone, putting further pressure on a currency that already
grapples with countries weighed down by stressed sovereign
debt.
"We think the risks are for a further slide in the euro over the remainder of the
year," said TD Securities analysts in Toronto.
In
the near term, investors could use the euro's bounce as an opportunity to place
new bets against the common currency, said Andrew Wilkinson,
senior market analyst at Interactive Brokers in
Greenwich, Conn.
Short-term investors have placed record bets against the euro in recent months. Though
they have recently pared some of those positions, anti-euro
bets still remain elevated.
Analysts said Friday markets were expected to be relatively thin, with traders in the
US and UK preparing for a three-day weekend. In thin markets, small
trades can sometimes have outsize influence.
- I-Net Bridge