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Johannesburg - The South African rand remained above
R7.30 against thedollar in early trade on Thursday, as the currency
consolidated around that key level.
At 08:35
local time the rand was bid at R7.3219 to the dollar from R7.3427 at Wednesday's
close. It was bid at R9.5388 to the euro from R9.5367 before and at R11.4210
against the sterling from R11.4306 at its previous close.
The euro
was bid at $1.3040 from $1.2993 overnight.
A trader
said the rand is consolidating around R7.30 per dollar, which is "a strong
technical level."
"Investors continue to buy high-yielding currencies like the rand,
Australian dollar and Turkish lira," the trader said.
RMB
analysts said in a morning report that a lower break is still possible, but it
is now not assured if EUR/USD can breach $1.30 and gap to $1.3125. They said
there was fresh speculation about another interest rate cut in South Africa
after the lower-than-expected inflation figure.
Local
June money supply and credit data, and PPI will probably impact only marginally
on rate expectations, they said.
The
global risk rally appeared to be losing momentum. US equity results continue to
come in strong but have basically been discounted, they added.
Data
released by the Reserve Bank on Thursday morning showed that PSCE grew at a
rate of 0.92% year-on-year (y/y) in June from 0.80% y/y in May.
The rate
of growth of South Africa's broad M3 money supply measure rose by 2.41% y/y in the year to end
June from 1.40% y/y in the year to end May.
The rate of
growth in PSCE was expected at 1.0% y/y, while M3 money supply aggregate growth
was expected at 2.3% y/y, according to an I-Net Bridge survey. Forecasts among
the nine leading economists surveyed for PSCE ranged from 0.8% to 1.3%, while
the range of forecasts for M3 was from 1.7% to 2.5% at the top of the
range.
The PPI - due at 11:30 - is expected to have reached 7.5% y/y in June from the
6.8% y/y seen in May, a survey by I-Net Bridge has found. Forecasts among the
10 leading economists surveyed ranged from 6.5% y/y to 8.6% y/y.
Dow
Jones Newswires reported the dollar declined against the yen in Asia on Thursday
on speculation that US Treasury yields will fall further due to concerns over a
slowdown in the world's biggest economy.
Strong
demand at a US five-year sovereign note auction overnight suggested that
recent weak economic reports from the US have made investors pessimistic
about the country's growth outlook.
- I-Net Bridge