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Rand follows euro stronger

Feb 25 2013 13:12 I-Net Bridge

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Johannesburg - The rand was firmer at noon due to a stronger euro‚ which regained losses from Friday.

There is a deluge of local events this week that could push the rand in either direction. The currency market is keenly awaiting the local fourth-quarter gross domestic product (GDP) figures out on Tuesday at 11:30.

On Wednesday the 2013-14 budget will be release at 14:00 and the January foreign trade balance will come out at 14:00 on Thursday.

“We have been trading in the R8.85/$ to 8.95/$ range for a while now‚ with nothing new out there to push the rand either way‚” said Mark Kalkwarf‚ currency dealer at the Iquad Group.

“There is a lot of pressure on the local government to cut interest rates‚ especially with the low interest rate scenario worldwide. If interest rates are cut‚ however‚ the possibility of foreign money inflows into our markets could reduce because the investors would earn less on their investments‚” he said.

“Foreign investors could then take their money elsewhere such as Turkey and Brazil where they could get a better return on their investment‚” he said.

“US Federal Reserve chairman Ben Bernanke’s speech on the third round of quantitative easing on Tuesday evening could be a currency mover. If he says that the US is going to limit bond buying in their markets it would be bad for the rand‚ because there would be less money to invest into our local market‚” he said.

At 12:17‚ the rand was bid at R8.8647/$ from R88.8871/$ at Friday’s close.

The local currency was bid at R11.7289/€ from its previous close of R11.6888/€ and at R13.4040 against sterling from R13.4277 before.


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