18 Feb 2013

Rand stronger in quiet midday trade

I-Net Bridge

Johannesburg - The rand was trading slightly stronger against the dollar at midday on Monday but is expected to remain quiet as US markets are closed today.

Mark Kalkwarf‚ a senior portfolio manager at the Iquad Group‚ said that some profit taking on Friday ahead of the US long weekend resulted in the rand “retracing from its strongest levels of just below R8.80 on Friday to open around R8.86 this morning.”

“The rand and the gold price decoupled many months ago and now it is the turn for the rand and equity markets to decouple as equity markets retreat after posting all-time highs‚ yet the rand continues to strengthen‚” he said.

At 11:33‚ the rand was bid at R8.8336/$ from Friday’s close of R8.8542. The local currency was bid at R11.8113/€ from its previous close of R11.8040 and at R13.6641 against sterling from R13.7173 before.

The euro was bid at $1.3362 from $1.3338 at Friday’s close.

Absa Capital said in a note that they expect the rand to stay within the R8.70 to R9.00/$ range this week. Although the bank believes that underlying sentiment remains bearish‚ “fresh developments in recent weeks have prompted some rand bears to cut some of their positions.” That said‚ the bank warned that SA's socio-economic situation and current account deficit remain causes for concern.

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