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Rand rally runs out of steam

Johannesburg - The rand was largely flat against the dollar in thin trading on Thursday and should stay trapped in current ranges until the year-end after a sharp rally earlier in the week ran out of steam on persistent concerns about Europe’s debt woes.

In morning trade the rand was at R8.2350/$, little changed from the previous close of R8.2421.

It was more than two percent off Wednesday’s high of R8.07/$ which failed to hold as the rand took its cue from a retreating euro, the currency of South Africa’s main trading partner the European Union.

“We’re going to keep on seeing these sort of movements linked to the euro because liquidity is thinning out with people going on holiday. There’s very little position-taking; flows are driving this thing,” Bidvest Bank chief dealer Ion de Vleeschauwer said.

“There’s a bit of exporter flow helping the currency a bit stronger at the moment but any sort of warble globally like we saw yesterday is going to affect the rand ... We’ll probably hang around the wide 8.10 - 8.30 range till the New Year.”

Government bonds were mixed, with the yield on the short-dated paper edging up three basis points to 6.82 percent while that for the 15-year bond was flat at 8.555%.

Trading volumes have also been thin on the debt market as the year heads to a close, with the Johannesburg bond exchange finishing earlier-than-usual at midday this week.
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Rand - Dollar
18.94
-0.0%
Rand - Pound
23.91
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Rand - Euro
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