Johannesburg - The rand is being driven by a combination of factors, William Van Rijn‚ head of spot forex trading at Nedbank Capital said.
“A stronger euro has assisted the rand and we’ve seen continued dollar selling offshore. So far in this session we haven’t really seen any strong demand for the dollar,” he said.
“In light of what occurred last week‚ emerging markets offering higher yields have benefited‚” said Van Rijn.
Last Friday the US reported weaker than expected March US nonfarm payrolls. US nonfarm payrolls rose by only 88 000 compared with the consensus forecast in a Dow Jones poll of 200 000.
The weaker jobs data in combination with a decision by The Bank of Japan to embark on a bold expansionary monetary policy that would see the bank inject $1.4 trillion into the economy in less than two years saw world markets fall last week.
“US nonfarm payroll data showed that the US is not quite as far down the road as people hoped‚ leading to general dollar weakness‚” Van Rijn said.
At 11:39‚ the rand was bid at R9.0515/$ from R9.0925 at Friday’s close and R9.1640 at Thursday’s close.
The local currency was bid at R11.7718/€ from its previous close of R11.8347 and at R13.8635 against sterling from R13.9645 before.
The euro was bid at $1.3004 from $1.3004 at Friday’s close and $1.2926 at Thursday’s close.
Earlier this morning the South African Reserve Bank (SARB) released the country’s foreign exchange reserve data for March. Foreign exchange reserves were down $385m to $40.887bn‚ while gold reserves rose by $52m to $6.446bn.
The Reserve Bank’s dollar-denominated holdings of gold and foreign assets fell by $365m to $50.009bn in March from $50.374bn in February.
The Bank said the fall in gross reserves reflected valuation adjustments emanating from the appreciation of the US dollar‚ which was partially offset by the increase in the market price for gold.