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Johannesburg - The rand remained firm in early trade on Monday amid a weaker US dollar. US and UK markets are closed for a holiday, so little direction will come from these sources.
At 08:45 the rand was bid at R8.2625 to the dollar from an overnight close of R8.2604. It was bid at R11.5830 to the euro from a previous R11.6045 and at R13.1518 against sterling from R13.1888.
The euro was bid at $1.4008 from $1.4027 overnight.
RMB analyst John Cairns said in his morning report that global risk appetite continues to slip, but for the currency markets the story is all about USD weakness.
With the EUR/USD pushing above $1.40, USD/ZAR dipped very briefly below the key R8.25 support level on Friday but it proved unable to sustain.
"Interestingly, after outperforming in April, the rand is now proving a considerable underperformer. Perhaps the rumoured large order in the market has been finished or perhaps the Sarb has finally started to accumulate reserves once again? Whatever the case, R8.25 on USD/ZAR remains intact and we will need
further USD weakness to get us through," Cairns said.
"With US and UK markets on holiday, there seems little risk of this today. But risks remain through the week as the USD has broken key support levels against the majors and is no longer finding support from risk taking. Key perhaps will be the interest in the $101bn in treasury bonds being issued this week," he said.
He puts the rand's range at R8.25 to R8.45.
Dow Jones newswires reports that the euro fell against the dollar and the yen on profit-taking on Monday morning in Tokyo.
- I-Net Bridge