Johannesburg - The rand was a tad softer against
the dollar in noon trade on Wednesday after breaking the 7.90 level
earlier, while the euro lost ground in spite of good economic data out
of Germany.
"The rand is just following the euro, and that's about it," a local currency trader said.
"It all boils down to debt concerns over Greece," he said.
At 11:40 local time, the rand was bid at R7.9620 to the dollar
from its previous close of R7.9496, after earlier trading at 7.8920. It
was bid at R10.3567 to the euro from R10.3643 before, and at R12.3794
against sterling from R12.4196 previously.
The euro was bid at $1.2998 from its previous close of $1.3034.
Dow Jones Newswires reported that in European trading hours,
the euro had weakened against the dollar, despite the release of a
better-than-expected German Ifo index.
The Ifo index for January came in at 108.3 points, against expectations of a reading of 107.6.
"The outcome is good news for the German economy and it
follows a 'healthy' improvement, also in German PMIs (purchasing managers' indices) earlier this week,"
said Newedge.
An improvement in January's Ifo reading showed further decline
was unlikely, a top economist from Germany's Ifo Institute told Dow
Jones Newswires following the release of the data.
However, Ifo's Klaus Abberger added that it was too early to
take Germany's economic upswing for granted due to the eurozone
sovereign debt crisis.
German confidence improved for the third month running in
January, showing "Germany isn't sliding into a dip, but is rather on the
way to improving a bit again", Abberger said.
The market would now turn to the outcome of the US Federal
Open Market Committee's (FOMC's) comments, scheduled to be released later on
Wednesday, when it was expected to reveal when its 17 officials expect the economy to be strong enough to justify an interest
rate rise.
While the FOMC was expected to preserve its current policy in
January, the statement and interest rate projections were expected to
affect the currency market as investors contemplated prospects for
future policy decisions.
Analysts said that if the FOMC signalled it would keep
rates low into 2014, longer than the current commitment for the middle
of the 2013, dollar selling could take place.