Johannesburg - The rand was slightly softer in midday trade on Monday after the euro weakened over the weekend before recovering slightly in the late morning. Sentiment‚ however‚ remains broadly positive.
Absa Capital said in a note that the fact that the euro had stopped strengthening may hinder some of the rand's recovery prospects in relation to the dollar‚ which is once again benefiting from its safe haven status.
At 11:23 the rand was bid at R8.8965/$ from Friday’s close of R8.8693. The local currency was bid at R11.9108/€ from its previous close of R11.8560 and at R13.9712 against sterling from R13.9846 before. The euro was bid at $1.3386 from Friday’s close of $1.3365.
“Despite the slight weakening before lunch the rand remains on the front foot as risk sentiment is buoyed by positive US and Chinese data released late last week‚” said Mark Kalkwarf‚ a senior portfolio manager at the Iquad Group.
He warned however that although the risks witnessed in January such as labour tensions and current account deficit have been put on the back burner for now‚ they still lingered in the background‚ and that may be the reason for the intraday weakening in the local currency.
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