Johannesburg – The rand strengthened at midday on Tuesday as participants react to talk about hedging the rand ahead of the World Government Bond Index (WGBI) buyback.
“Yesterday the rand was trading above R8.30 against the dollar‚ so all the movement has happened this morning‚ due to talk of hedging the rand ahead of the WGBI. This has provided rand strength‚” said Mark Kalkwarf‚ a senior portfolio manager from the Iquad group.
At 11:26 local time‚ the rand was bid at R8.2075 to the dollar from R8.2408 at Monday’s close. It was bid at R10.5934 to the euro from its previous close of R10.6585 and at R13.3133 against sterling from R13.3688 before.
The euro was bid at $1.2909 from $1.2930 at Monday’s close.
“There hasn’t been anything to suggest why the rand decoupled from the euro in August. The dollar is strengthening against the euro but not the rand. Eurozone fears are still abundant and weaker German data also disappointed traders‚” Kalkwarf said.