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Rand firm on weaker dollar

Nov 18 2009 15:55

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Johannesburg - The rand remained firm in the afternoon session on Wednesday amid record gold prices and a weaker greenback.

At 15:37 the rand was bid at 7.4270 to the dollar from 7.4810 at its previous close. It was bid at 11.0848 to the euro from its previous close of 11.1168 and was at 12.4753 against sterling from 12.5678.

The euro was bid at $1.4945 from $1.4862 overnight.

A local currency trader said: "The predominant factors moving the rand have been a weaker dollar, along with record gold.

"I am surprised by the weakened dollar, as I had expected it to strengthen, however, I would caution that it should do so [firm] in the coming weeks."

Dow Jones Newswires reported that the euro advanced against the dollar on Wednesday morning as a stronger appetite for risk fuelled a rally in oil, gold, copper and other commodities that boosted stock markets.

Crude oil rose above $80 a barrel and gold hit a fresh record high in overnight trading, lendng support to other riskier assets. US stocks are set to open slightly higher on improved sentiment about a global recovery after Tuesday's less-than-inspiring US economic data.

Despite the more upbeat mood, the euro has failed to rise past the key psychological level of $1.50 and remains confined to recent ranges.

Investors will be eyeing two US economic reports to assess the speed of the recovery and if the risk-on environment which has helped lift the euro and other higher-yielding currencies will remain in place. US consumer price index and housing starts for October are both scheduled for release on Wednesday.

- I-Net Bridge

 
 
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