Johannesburg - The rand eased in midday trade on Wednesday as the euro slid back below the $1.31 level.
"Yesterday's massive foreign buying on the Citigroup news has been replaced by the normal link to the euro, so as that slides, so we follow," a local trader said.
News emerged from Citigroup on Tuesday that SA government bonds were entering a monitoring period for inclusion in their World Government Bond Index (WGBI) in October. This saw the rand and local bonds rally significantly, with the currency appreciating 16 cents to 7.82/dollar since the announcement and the bond curve strengthening 21 basis points in the benchmark R157, 25 basis points in the R186 and 27 basis points at the very long end.
At 11:33 local time the rand was bid at R7.8302 to the dollar after touching R7.7790 earlier this morning from its previous close of R7.7893 and Monday's close of R7.9368. It was bid at R10.2340 to the euro from R10.2251 before, and at R12.5045 against sterling from R12.4163 previously.
The euro was bid at $1.3079 from its previous close of $1.3125 after sinking to a two-month low of $1.2993 on Monday.
RMB expected a volatile day today as the WGBI news dissipated.
"A combination of the Citigroup global bond index rerating, good news from Europe and the IMF, and decent Wall Street results helped the rand to its best year-to-date performance yesterday. USD/ZAR dropped to a low of 7.78, EUR/ZAR to 10.21 and GBP/ZAR to 12.35 or so. While the bond reweighting news may help over the next few days, it looks likely that the overall impetus for gains have eased. Expect a volatile day as the market tries to find a new level, however, with no obvious direction the markets will shift into a wait and see mode ahead of the Spanish bond auction tomorrow," the bank said.
Dow Jones Newswires reported that the yen fell versus other major currencies on Wednesday in Asia as easing concerns over global economic growth boosted regional stock markets and as expectations rose over possible additional easing steps by the Bank of Japan next week.
Asian stocks gained broadly with the Nikkei up 2.0% amid eased concerns over a global economic recovery after the International Monetary Fund's global growth forecast hike, a smooth Spanish Treasury bill auction and stronger-than-expected German ZEW economic sentiment data on Tuesday.
"Yesterday's massive foreign buying on the Citigroup news has been replaced by the normal link to the euro, so as that slides, so we follow," a local trader said.
News emerged from Citigroup on Tuesday that SA government bonds were entering a monitoring period for inclusion in their World Government Bond Index (WGBI) in October. This saw the rand and local bonds rally significantly, with the currency appreciating 16 cents to 7.82/dollar since the announcement and the bond curve strengthening 21 basis points in the benchmark R157, 25 basis points in the R186 and 27 basis points at the very long end.
At 11:33 local time the rand was bid at R7.8302 to the dollar after touching R7.7790 earlier this morning from its previous close of R7.7893 and Monday's close of R7.9368. It was bid at R10.2340 to the euro from R10.2251 before, and at R12.5045 against sterling from R12.4163 previously.
The euro was bid at $1.3079 from its previous close of $1.3125 after sinking to a two-month low of $1.2993 on Monday.
RMB expected a volatile day today as the WGBI news dissipated.
"A combination of the Citigroup global bond index rerating, good news from Europe and the IMF, and decent Wall Street results helped the rand to its best year-to-date performance yesterday. USD/ZAR dropped to a low of 7.78, EUR/ZAR to 10.21 and GBP/ZAR to 12.35 or so. While the bond reweighting news may help over the next few days, it looks likely that the overall impetus for gains have eased. Expect a volatile day as the market tries to find a new level, however, with no obvious direction the markets will shift into a wait and see mode ahead of the Spanish bond auction tomorrow," the bank said.
Dow Jones Newswires reported that the yen fell versus other major currencies on Wednesday in Asia as easing concerns over global economic growth boosted regional stock markets and as expectations rose over possible additional easing steps by the Bank of Japan next week.
Asian stocks gained broadly with the Nikkei up 2.0% amid eased concerns over a global economic recovery after the International Monetary Fund's global growth forecast hike, a smooth Spanish Treasury bill auction and stronger-than-expected German ZEW economic sentiment data on Tuesday.