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Johannesburg - The rand remained firmer against
the dollar in late afternoon trade on Tuesday as it tracked a euro that
stayed steady on the eve of Europe's next cheap long-term bank funding
exercise.
"Not much has changed as far as the rand goes as its trend is in line with prior sessions," a local analyst said.
"We weren't expecting too much change in the trend prior to the long-term refinancing operation auction tomorrow given the fact that it's just another event in which global quantitative easing will be expanded."
The analyst said he had not seen any reaction from the rand to local GDP figures released earlier.
"Traders seem pretty comfortable to stick to their positions for now."
While the analyst said that US data just out had shown a decline in durable goods figures, this would not affect dollar rand.
At 15:43 local time, the rand was bid at R7.5259 to the dollar from its previous close of R7.5517. It was bid at R10.1220 to the euro from R10.1189 before, and at R11.9249 against sterling from R11.9441 previously.
The euro was bid at $1.3447 from its previous close of $1.3407.
Statistics SA said earlier that the seasonally adjusted real GDP at market prices for the fourth quarter of 2011 had increased by an annualised rate of 3.2% compared with an increase of 1.7% [1.4%] in the third quarter.
Meanwhile, Dow Jones Newswires reported that currency markets treaded water in European trade on Tuesday as dealers hunkered down before the next eurozone fix of cheap long-term bank funding, with the euro holding near 12-week highs against the dollar.
Against a backdrop of weaker oil prices, slightly firmer shares and a well-received Italian government bond sale, the euro held above $1.34, while the greenback was steady against the yen but well short of the near nine-month high of Y81.66 struck Monday, having bounced off the Y80 mark in overnight trade.
The main focus was Wednesday's second-scheduled three-year long-term refinancing operation (LTRO) by the European Central Bank, after a bumper EUR489 billion was enthusiastically snapped up by banks in December, helping to avert a threatened credit crunch and providing a floor of support for a host of currencies against the buck.
Consensus forecasts pointed to similar levels of bank demand this time around, but doubts abounded as to how much of the expected extra liquidity might trickle down to the real eurozone economy, which mostly continued to wilt under the weight of a concerted austerity drive.
Beyond the LTRO, Morgan Stanley said it saw very little further positive news to support the euro.
"Further rating downgrades in Europe, concerns that other countries at the periphery are missing their targets and broader questions regarding the growth outlook, especially in a higher oil price environment, are likely to see the euro struggling to maintain the recovery beyond Wednesday's events," strategists at the US bank said in a note.
Speaking at a conference in London, Moritz Kraemer, head of sovereign ratings for Europe, Middle East and Africa at Standard & Poor's Corp, also said there was a real risk now of a eurozone crisis if the economies of member states were pushed too hard.
Turning to the US, Dow Jones Newswires added that although the 4.0% drop in new orders for durable goods was the largest in three years, it was important to note new orders had increased the three previous months, including solid gains of 3.2% in December and 4.2% in November.
Thanks to those increases, factories had a healthy backlog of orders that needed to be filled - which would keep production lines moving. Unfilled orders, a sign of future demand, rose 0.5% last month, after rising 1.5% in December, the fastest pace since 2008.
"Not much has changed as far as the rand goes as its trend is in line with prior sessions," a local analyst said.
"We weren't expecting too much change in the trend prior to the long-term refinancing operation auction tomorrow given the fact that it's just another event in which global quantitative easing will be expanded."
The analyst said he had not seen any reaction from the rand to local GDP figures released earlier.
"Traders seem pretty comfortable to stick to their positions for now."
While the analyst said that US data just out had shown a decline in durable goods figures, this would not affect dollar rand.
At 15:43 local time, the rand was bid at R7.5259 to the dollar from its previous close of R7.5517. It was bid at R10.1220 to the euro from R10.1189 before, and at R11.9249 against sterling from R11.9441 previously.
The euro was bid at $1.3447 from its previous close of $1.3407.
Statistics SA said earlier that the seasonally adjusted real GDP at market prices for the fourth quarter of 2011 had increased by an annualised rate of 3.2% compared with an increase of 1.7% [1.4%] in the third quarter.
Meanwhile, Dow Jones Newswires reported that currency markets treaded water in European trade on Tuesday as dealers hunkered down before the next eurozone fix of cheap long-term bank funding, with the euro holding near 12-week highs against the dollar.
Against a backdrop of weaker oil prices, slightly firmer shares and a well-received Italian government bond sale, the euro held above $1.34, while the greenback was steady against the yen but well short of the near nine-month high of Y81.66 struck Monday, having bounced off the Y80 mark in overnight trade.
The main focus was Wednesday's second-scheduled three-year long-term refinancing operation (LTRO) by the European Central Bank, after a bumper EUR489 billion was enthusiastically snapped up by banks in December, helping to avert a threatened credit crunch and providing a floor of support for a host of currencies against the buck.
Consensus forecasts pointed to similar levels of bank demand this time around, but doubts abounded as to how much of the expected extra liquidity might trickle down to the real eurozone economy, which mostly continued to wilt under the weight of a concerted austerity drive.
Beyond the LTRO, Morgan Stanley said it saw very little further positive news to support the euro.
"Further rating downgrades in Europe, concerns that other countries at the periphery are missing their targets and broader questions regarding the growth outlook, especially in a higher oil price environment, are likely to see the euro struggling to maintain the recovery beyond Wednesday's events," strategists at the US bank said in a note.
Speaking at a conference in London, Moritz Kraemer, head of sovereign ratings for Europe, Middle East and Africa at Standard & Poor's Corp, also said there was a real risk now of a eurozone crisis if the economies of member states were pushed too hard.
Turning to the US, Dow Jones Newswires added that although the 4.0% drop in new orders for durable goods was the largest in three years, it was important to note new orders had increased the three previous months, including solid gains of 3.2% in December and 4.2% in November.
Thanks to those increases, factories had a healthy backlog of orders that needed to be filled - which would keep production lines moving. Unfilled orders, a sign of future demand, rose 0.5% last month, after rising 1.5% in December, the fastest pace since 2008.
