Rand softer, tracks euro/USD

At 11:42 local time the rand was bid at R7.3503 to the dollar from R7.3196 at Thursday's close. It was bid at R9.5499 to the euro from R9.5660 before and at R11.4687 against the sterling from R11.4109 at its previous close.

The euro was bid at $1.3007 from $1.3077 overnight.

"The rand is a bit softer following the euro which came off against the US dollar and yen amid negative global sentiment, with the main equities globally in negative territory," said a local trade.

Although local trade data is often erratic and difficult to predict, it does sometimes move the local currency if it is outside economists' expectations.

South Africa's foreign trade balance with its non-Southern African Customs Union trading partners is expected to have reached a R1.1bn deficit in June from the R0.3bn deficit of May, according to a survey by I-Net Bridge.

A record R17.4bn deficit was set in January last year, but a few surprise surpluses have been registered since then as export performance began to improve, while the recession crimped back on imports.

Forecasts among the leading economists surveyed varied from a R3.0bn deficit to a R0.6bn surplus.

Customs and Excise is set to release the latest foreign trade data at 14:00.

Dow Jones Newswires reports that both the euro and the dollar were being sold on Friday with the yen rising to a 2010 high against its US counterpart.

End-month positioning as well reserve management by central banks were cited as market movers, as investors continued to worry about the strength of the US recovery.

The latest downturn in global sentiment came after St. Louis Fed President James Bullard warned that deflation risks in the US are greater than they were earlier this year.

His unexpectedly dovish remarks raised expectations that the Fed may yet ease monetary policy again, and helped to push US Treasury yields lower.

Financial markets will now be looking to see if second-quarter GDP later in the day confirms this bearish view of the economy. The consensus forecast is for growth to slow to 2.5% from 2.7% in the first quarter.

The University of Michigan will also be releasing its latest consumer confidence survey, with the main index expected to fall to 67.2 this month from 76.0 last month.

Despite the negative news about the US economy, the euro was pushed back down against the dollar. Analysts said the single currency appeared to have lost momentum after rallying up to $1.3107 on Thursday, its highest level since May 4.

  - I-Net Bridge