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May 27 2012 11:21
There's a price war raging between South Africa's cellphone networks after Cell C lowered the rates of its prepaid calls by more than 34%.
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Johannesburg - The rand was trapped in a tight range by midday on Wednesday. It was in what a trader described as a
consolidatory period.
At 11:34 the rand was bid at R7.4142 to the dollar from R7.3777 at its previous close. It was bid at R10.0656 to the euro from its previous close of R10.0385 and was at R11.0293 against the sterling from R11.0626.
The euro was bid at $1.3587 from $1.3605 previously.
A local trader said: "The rand is in a tight range, similar to yesterday, at R7.37 to R7.47 against the dollar. I think we are seeing a period of consolidation, ahead of any further moves."
RMB analysts in their morning report noted that the managing director of the IMF, Dominique Strauss-Kahn, weighed in on the debate on artificially weakening the rand, saying that it would be a "very short-sighted" move for SA to make.
Strauss-Kahn stressed the importance of maintaining investor interest in South Africa, citing the weakening of the rand as a possible deterrent to capital market inflows, which is used to finance the country's expansive current account deficit, a concept that we continue to emphasis as a risk to our long-term US dollar/rand forecast, RMB said.
"The local unit has however been rather subdued of late and is expected to trade within a 10c-15c range today owing to moderate event risk. A mild bout of risk aversion and marginally lower commodity prices appear to have tempered rand gains, though support is still evident around US dollar/rand R7.34,"
analysts John Cairns and Nema Ramkhelawan said.
Dow Jones Newswires reported that in the European foreign exchanges, currencies traded in tight ranges Wednesday as investors looked for fresh cues.
At 09:10 GMT, the euro was quoted at $1.3574, down from $1.3602 in late New York trade on Tuesday, despite Japanese importer buying of the single currency on a regular settlement day. The dollar was trading at ¥90.25, up from ¥89.97.
European investors will continue to keep a close eye on the Greek debt situation, after the country's prime minister met US President Obama on Tuesday, reiterating the fact that Greece was not asking for financial help from anyone.
- I-Net Bridge