Johannesburg – The rand regained
ground on Friday afternoon but still remained a little softer
compared with Wednesday’s closing levels.
The local currency weakened earlier in
the day to 8.16 to the US dollar after China’s disappointing trade
balance data re-ignited market concerns about the strength of the
world’s second biggest economy.
At 3.45pm local time the rand was bid
at R8.1090 to the dollar from Thursday’s close of R8.0793. It was
bid at R9.9331 to the euro from its previous close of R9.9415 and at
R12.6387 against sterling from R12.6290 before.
The euro was bid at US$1.2248 from
$1.2303.
China's trade surplus in July came in
narrower than expected at US$25.1bn from $31.7bn in June‚ falling
short of a median $35.2bn forecast by economists in a Dow Jones
Newswires survey. Exports rose 1% in July from a year earlier‚
worse than June's 11.3% rise and below economists' median forecast of
a 8.0% expansion. Imports rose 4.7% from a year earlier‚ down from
the 6.3% rise in June.
“The (China) trade data has put
pressure on risky assets. Commodity-based currencies such as the rand
will struggle to strengthen given signs of anaemic economic growth in
that country‚” said Mike Keenan‚ sub-Saharan currency
strategist at Absa Capital.
Standard Bank analysts said in a note
that they would stick with their bearish side of consensus targeting
8.60 to the US dollar in the fourth quarter 2012. This‚ to a
significant extent‚ is based on their stronger than consensus
dollar call.
“We have kept the rand at 8.60
through first quarter 2013‚ consistent with our call regarding the
timing of the strongest point for the dollar versus the euro. There
is some security surrounding flows through the local currency market‚
in the short term‚ provided by World Government Bond Index
inclusion on October 1‚ but we would not be surprised to see a
correction in local bonds and the rand shortly after this deadline.
Our end-Q3:12 target sits at 8.30 to the dollar.”