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Johannesburg - The rand was steady but firm in morning trade on Tuesday, tracking a strong euro.
A local dealer noted range-bound trade. "We need to break through 6.87 against the dollar to get interesting," he said.
At 09:07 local time, the rand was bid at R6.9166 versus the dollar from its previous close of R6.9255. It was bid at R9.8762 to the euro from R9.8390 before and at R11.2912 against sterling from R11.2791 at its previous close.
The euro was bid at $1.4232 against $1.4217 previously.
Michael Keenan, a currency strategist at Standard Bank, said in a morning note that the rand had benefited from risk-on sentiment. "We expect little reaction from rand participants to the Monetary Policy Committee (MPC) meeting on Thursday because global investor sentiment surrounding Japan and the Middle East, north Africa region is still dictating the rand's movements. A risk-on frame of mind seems to have returned as the nuclear threat in Japan has been reduced and allied forces have intervened in Libya.
"Safe-haven assets such as US treasuries and the Swiss franc are slipping, while risky assets such as equities are rallying. This explains why the rand is back below 7.00. A downward breach of R6.90 could open the door to R6.80. However, the uncertainty about Japan and the Middle East, north Africa region could mean that R6.90 will provide stubborn resistance to rand bulls," Keenan said.
Meanwhile, Dow Jones Newswires has reported that the buying by Japanese exporters pushed the yen up slightly against the dollar and the euro in Asia on Tuesday, though gains were limited as short-term investors refrained from getting onboard amid concerns about possible intervention.
Japanese Finance Minister Yoshihiko Noda said on Tuesday that the Group of Seven (G7) leading industrialised nations will continue to co-operate after pledging joint intervention to tame the yen last week. A person familiar with international currency policy told Dow Jones Newswires that Friday's G7 pledge should not be considered limited only to that day.
"It's now a lot harder for speculators to buy the yen, which means for the time being those kinds of speculative moves have likely been suppressed," says Hideaki Inoue, a senior foreign exchange dealer at Mitsubishi UFJ Trust and Banking.
"I think the trend should be toward a weaker yen for now, given the threat of intervention and the moves by the Bank of Japan to ease further, which make it harder for speculators to buy the yen," said Inoue.
A local dealer noted range-bound trade. "We need to break through 6.87 against the dollar to get interesting," he said.
At 09:07 local time, the rand was bid at R6.9166 versus the dollar from its previous close of R6.9255. It was bid at R9.8762 to the euro from R9.8390 before and at R11.2912 against sterling from R11.2791 at its previous close.
The euro was bid at $1.4232 against $1.4217 previously.
Michael Keenan, a currency strategist at Standard Bank, said in a morning note that the rand had benefited from risk-on sentiment. "We expect little reaction from rand participants to the Monetary Policy Committee (MPC) meeting on Thursday because global investor sentiment surrounding Japan and the Middle East, north Africa region is still dictating the rand's movements. A risk-on frame of mind seems to have returned as the nuclear threat in Japan has been reduced and allied forces have intervened in Libya.
"Safe-haven assets such as US treasuries and the Swiss franc are slipping, while risky assets such as equities are rallying. This explains why the rand is back below 7.00. A downward breach of R6.90 could open the door to R6.80. However, the uncertainty about Japan and the Middle East, north Africa region could mean that R6.90 will provide stubborn resistance to rand bulls," Keenan said.
Meanwhile, Dow Jones Newswires has reported that the buying by Japanese exporters pushed the yen up slightly against the dollar and the euro in Asia on Tuesday, though gains were limited as short-term investors refrained from getting onboard amid concerns about possible intervention.
Japanese Finance Minister Yoshihiko Noda said on Tuesday that the Group of Seven (G7) leading industrialised nations will continue to co-operate after pledging joint intervention to tame the yen last week. A person familiar with international currency policy told Dow Jones Newswires that Friday's G7 pledge should not be considered limited only to that day.
"It's now a lot harder for speculators to buy the yen, which means for the time being those kinds of speculative moves have likely been suppressed," says Hideaki Inoue, a senior foreign exchange dealer at Mitsubishi UFJ Trust and Banking.
"I think the trend should be toward a weaker yen for now, given the threat of intervention and the moves by the Bank of Japan to ease further, which make it harder for speculators to buy the yen," said Inoue.
