Rand firms on German data

Johannesburg - The rand was firmer against the dollar in noon trade on Thursday, as it tracked a euro boosted by business climate data out of Germany.

"The German Ifo data that came out this morning was better than expected and the euro then firmed, and so did the rand," a local currency trader said.

He put dollar rand in a range of 7.64 to 7.72 for the remainder of the session.

The trader said the rand had shown little reaction to local producer price index (PPI) data released earlier.

At 12:05 local time, the rand was bid at R7.6756 to the dollar from its previous close of R7.7226. It was bid at R10.2260 to the euro from R10.2318 before, and at R12.0540 against sterling from R12.0926 previously.

The euro was bid at US$1.3322 from its previous close of US$1.3255.

Statistics SA said SA's PPI registered growth of 8.9% year-on-year (y/y) in January from 9.8% y/y in December and 10.1% y/y in November.

The average annual change for 2011 was 8.4% compared with 6.0% in 2010. The PPI, on a monthly basis, was 0.3% after decreasing slightly between November and December 2011.

The PPI was expected to clock in at 9.5% y/y in January, a survey by I-Net Bridge found. Forecasts among five leading economists surveyed ranged from 8.8% y/y to 9.6% y/y.

Meanwhile, Dow Jones Newswires reported that the euro was up versus the dollar, with investors focusing on a better-than-expected German Ifo survey, while concerns about Greece's latest bailout programme were put aside.

Investors had been concerned about economic data, after Wednesday's eurozone composite purchasing managers' index data for February contracted and came in below consensus.

In February, the Ifo index increased to 109.6 from 108.3 in January.

"Today's Ifo index provides further evidence that the economic contraction at the end of last year was only a brief stopover," said Carsten Brzeski, economist at ING Bank.

"It looks as though almost nothing can shatter German business optimism," he said.