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Johannesburg - The rand remained firmer against
the dollar in noon trade on Wednesday as it tracked a euro that held on
to gains ahead of this weekend's European summit.
"The local consumer inflation data had no effect on the rand as the figures came in more or less as expected," a market analyst said.
"There's a lot of uncertainty and volatility about the rand at the moment.
"The fact that the Guardian newspaper reported Tuesday that France and Germany were ready to boost the European Financial Stability Facility to two trillion euros and that this was later denied, hasn't helped matters."
At 11:54 local time, the rand was trading at 7.9526 to the dollar from its previous close of 7.9634. It was trading at 11.0070 to the euro from 10.9472 before, and at 12.5521 against sterling from 12.5150 previously.
The euro was at $1.3847 from $1.3732 before.
Earlier Statistics SA reported that the increase in consumer inflation was 5.7% year on year (y/y) in September, from 5.3% y/y in August.
The Consumer Price Index (CPI) for September was expected to tick up to 5.6% year on year (y/y), according to a survey of leading economists by I-Net Bridge. Forecasts among the twelve economists had ranged from 5.5% to 5.8%.
The CPI was 0.4% month on month (m/m) from 0.2% in August.
RMB currency strategists said in a morning note that the rand remained what dealers had called "headlines-driven", first weakening yesterday as hopes for a weekend solution to the Eurozone crisis were dashed by reports out of Germany and then bouncing back due to reports from France and the UK.
"Jittery trade will continue - if you can predict the next headline you can predict the rand."
RMB added that Europe's problems continued to escalate.
"Greeks will take to the streets today protesting against austerity, Spain has had its credit rating cut again, there have been warnings over France's rating, and sovereign yields are rising dramatically. We need a solution quickly."
It remained unclear how much should be expected from this weekend's summit.
"German officials have downplayed the scope for a definitive solution'. French officials have done the opposite. Meanwhile, the Guardian newspaper reports that France and Germany have agreed to expand the bailout fund to two trillion euros - the higher end of what markets have been hoping for. This has been denied, or not, depending on which source you read."
RMB said dollar/rand had reached the 8.08 level yesterday but was back under 8.00 this morning due to the latest headlines.
Euro/dollar still seemed to be heading lower "so maybe we can recapture the low 7.90s when trade really gets going but more than this is dependent on the headlines - 7.78 offers firm support."
While international news dominated, there remained an underlying trend of underperformance in the rand.
"This became prominent last week and has remained the case into this week. Most people seem to think that this must relate to a large order going through the market. If so, then the rand would acquire a firmer footing once the order is completed. This effect though is completely swamped by the European news."
Meanwhile Dow Jones Newswires reported that during European trading hours, the euro had ticked up amid stronger equities in Asia, although traders were sceptical of any sustained gains for the single currency as investors awaited concrete plans to contain the euro-zone debt crisis.
"The local consumer inflation data had no effect on the rand as the figures came in more or less as expected," a market analyst said.
"There's a lot of uncertainty and volatility about the rand at the moment.
"The fact that the Guardian newspaper reported Tuesday that France and Germany were ready to boost the European Financial Stability Facility to two trillion euros and that this was later denied, hasn't helped matters."
At 11:54 local time, the rand was trading at 7.9526 to the dollar from its previous close of 7.9634. It was trading at 11.0070 to the euro from 10.9472 before, and at 12.5521 against sterling from 12.5150 previously.
The euro was at $1.3847 from $1.3732 before.
Earlier Statistics SA reported that the increase in consumer inflation was 5.7% year on year (y/y) in September, from 5.3% y/y in August.
The Consumer Price Index (CPI) for September was expected to tick up to 5.6% year on year (y/y), according to a survey of leading economists by I-Net Bridge. Forecasts among the twelve economists had ranged from 5.5% to 5.8%.
The CPI was 0.4% month on month (m/m) from 0.2% in August.
RMB currency strategists said in a morning note that the rand remained what dealers had called "headlines-driven", first weakening yesterday as hopes for a weekend solution to the Eurozone crisis were dashed by reports out of Germany and then bouncing back due to reports from France and the UK.
"Jittery trade will continue - if you can predict the next headline you can predict the rand."
RMB added that Europe's problems continued to escalate.
"Greeks will take to the streets today protesting against austerity, Spain has had its credit rating cut again, there have been warnings over France's rating, and sovereign yields are rising dramatically. We need a solution quickly."
It remained unclear how much should be expected from this weekend's summit.
"German officials have downplayed the scope for a definitive solution'. French officials have done the opposite. Meanwhile, the Guardian newspaper reports that France and Germany have agreed to expand the bailout fund to two trillion euros - the higher end of what markets have been hoping for. This has been denied, or not, depending on which source you read."
RMB said dollar/rand had reached the 8.08 level yesterday but was back under 8.00 this morning due to the latest headlines.
Euro/dollar still seemed to be heading lower "so maybe we can recapture the low 7.90s when trade really gets going but more than this is dependent on the headlines - 7.78 offers firm support."
While international news dominated, there remained an underlying trend of underperformance in the rand.
"This became prominent last week and has remained the case into this week. Most people seem to think that this must relate to a large order going through the market. If so, then the rand would acquire a firmer footing once the order is completed. This effect though is completely swamped by the European news."
Meanwhile Dow Jones Newswires reported that during European trading hours, the euro had ticked up amid stronger equities in Asia, although traders were sceptical of any sustained gains for the single currency as investors awaited concrete plans to contain the euro-zone debt crisis.
