Johannesburg - The rand remained firm in midday
trade on Monday afternoon, with the trade data to be released by revenue
authorities later in the day unlikely to have a significant impact
thereon.
The rand's performance was a continuation of the morning trade, which was also range-bound, with analysts expecting little movement of the local currency until the outcome of the European Central Bank (ECB) meeting later this week.
"The rand has been pretty much flat, consolidating its gains. Nothing really much has happened since the morning; the holidays haven't had an impact either. We are seeing exactly the same conditions," a local rand trader said.
SA markets were closed on Friday for the Freedom Day holiday and Tuesday is Workers Day, another public holiday.
At 12:25 local time the rand was bid at R7.7523 to the dollar from its previous close of R7.7340. It was bid at R10.2341 to the euro from R10.2559 before, and at R12.5895 against sterling from R12.6011 previously.
The euro was bid at $1.3213 from its previous close of $1.3239.
Absa Capital in their morning report said they expected the rand to remain stable throughout afternoon trade.
"We would expect the ZAR to remain well bid so long as risk appetite doesn't stall, but we are mindful that ZAR bulls have repeatedly struggled to breach R7.73 to the downside. Given that tomorrow is also a public holiday in SA, we expect trade volumes to remain relatively light today and look for the ZAR to consolidate Friday's gains," said Absa.
Absa added that there were some encouraging improvements in consumption and residential investment, which reinforced its view that the US recovery was still on track and that it remained unlikely that additional stimulus programmes would be required from the Fed.
"The USD weakened in the wake of the GDP data, but Wall Street rallied and US Treasury yields were largely unchanged, which suggests that market participants also appear to be relatively sanguine about the US growth outlook, which, in turn, is supportive of a risk-on environment. ZAR bulls and risky assets in general also appeared to brush aside Friday's downgrade of Spain, by S&P," the bank said.
Absa, however, warned that rand dealers would be mindful of trade data to be released later in the day.
Dow Jones Newswires reported that the dollar sagged against the yen and emerging Asian currencies on Monday as more signs of strain on the US economy spurred expectations of further easing by the Fed.
Some of the optimism on the US economy that contributed to the greenback's turnaround against the yen this year appears to be wearing off, while the Bank of Japan's announcement on Friday of further easing did virtually nothing to slow the yen's ascent.
"Our view is that over the last few months, Bank of Japan easing has had only a marginal impact," said Robert Ryan, G-10 currency strategist at BNP Paribas. "If the dollar were to move back toward Y77 or Y76, it would call into question the whole rationale for the BOJ to ease further."
The rand's performance was a continuation of the morning trade, which was also range-bound, with analysts expecting little movement of the local currency until the outcome of the European Central Bank (ECB) meeting later this week.
"The rand has been pretty much flat, consolidating its gains. Nothing really much has happened since the morning; the holidays haven't had an impact either. We are seeing exactly the same conditions," a local rand trader said.
SA markets were closed on Friday for the Freedom Day holiday and Tuesday is Workers Day, another public holiday.
At 12:25 local time the rand was bid at R7.7523 to the dollar from its previous close of R7.7340. It was bid at R10.2341 to the euro from R10.2559 before, and at R12.5895 against sterling from R12.6011 previously.
The euro was bid at $1.3213 from its previous close of $1.3239.
Absa Capital in their morning report said they expected the rand to remain stable throughout afternoon trade.
"We would expect the ZAR to remain well bid so long as risk appetite doesn't stall, but we are mindful that ZAR bulls have repeatedly struggled to breach R7.73 to the downside. Given that tomorrow is also a public holiday in SA, we expect trade volumes to remain relatively light today and look for the ZAR to consolidate Friday's gains," said Absa.
Absa added that there were some encouraging improvements in consumption and residential investment, which reinforced its view that the US recovery was still on track and that it remained unlikely that additional stimulus programmes would be required from the Fed.
"The USD weakened in the wake of the GDP data, but Wall Street rallied and US Treasury yields were largely unchanged, which suggests that market participants also appear to be relatively sanguine about the US growth outlook, which, in turn, is supportive of a risk-on environment. ZAR bulls and risky assets in general also appeared to brush aside Friday's downgrade of Spain, by S&P," the bank said.
Absa, however, warned that rand dealers would be mindful of trade data to be released later in the day.
Dow Jones Newswires reported that the dollar sagged against the yen and emerging Asian currencies on Monday as more signs of strain on the US economy spurred expectations of further easing by the Fed.
Some of the optimism on the US economy that contributed to the greenback's turnaround against the yen this year appears to be wearing off, while the Bank of Japan's announcement on Friday of further easing did virtually nothing to slow the yen's ascent.
"Our view is that over the last few months, Bank of Japan easing has had only a marginal impact," said Robert Ryan, G-10 currency strategist at BNP Paribas. "If the dollar were to move back toward Y77 or Y76, it would call into question the whole rationale for the BOJ to ease further."