Johannesburg - The rand was virtually
at its overnight levels in morning trade on Friday, amid very little action.
At 08:55 the rand was bid at 7.3073 to the dollar from 7.3065 at its
previous close. It was bid at 9.9524 to the euro from its previous close of
9.9455 and was at 11.0923 against the sterling from 11.1285.
The euro was bid at $1.3615 from $1.3609 previously.
A local trader said: "We expect a quiet day with very little data to
provide significant direction.
"We really need some movement from the euro above 10 against the rand to
see any action, while dollar/rand continues to trade in a tight range."
RMB analysts in their morning report noted that rumours of potential IMF
assistance to Greece continue to reverberate through the markets, dragging
euro/US dollar lower. The rising cost of Greece's debt reflects increasing
panic among investors as the deadline for the debt-ridden nation to refinance
€20bn of its debt, draws near.
"The pledge, made by EU finance ministers on
Monday, to support Greece offered the euro some respite as it was perceived as
a precursor to a sustainable funding mechanism. However a definite plan is yet
to be announced leaving Greece and the euro in limbo," said analysts John
Cairns and Nema Ramkhelawan.
"US dollar/rand seems relatively unperturbed by euro/US dollar's woes. The
local unit is prospering below US dollar/rand 7.30, while euro/US dollar
languishes around 1.36, highlighting the increasing divergence between the
currency pairs. While support for US dollar/rand is evident around 7.25, a lack
of impetus may stall further rand gains. We therefore anticipate mild
fluctuations in the rand today," Cairns and Ramkhelawan said.
In sharp contrast to yesterday's flood of international data there is
little in the way of event risk today, RMB concluded.
Dow Jones Newswires reported the euro rose against the yen and dollar in
Asia Friday as Japanese short-term investors who have recently bet heavily
against the common currency bought it back to hedge against the slight chance
it may rise into next week.
But dealers said the euro-buying was merely a safety precaution before a
three-day weekend in Japan. The currency may fall again in coming sessions on
lingering concerns over Greece's fiscal woes, they said.
"The outlook for the euro remains negative," said Yuji Saito, director of
the foreign exchange department at Credit Agricole Corporate and Investment
Bank. "The Japanese players buying the euro today are doing so just because the
market will be closed Monday in Japan, and they don't want to be caught without
any hedges just in case there would be any euro-positive developments while
they're on holiday."
The common currency stood at $1.3622 at 04:50 GMT, up from $1.3611 late on Thursday in New York.
But the common currency would likely be capped at $1.3650 and ¥123.50 for
the rest of the global day, said Osao Iizuka, head of foreign exchange trading
at Sumitomo Trust & Banking.
The outlook for the euro in the coming weeks is bleak, as Greece appears
unlikely to receive financial support from the European Union, dealers said.
Elsewhere, the dollar edged up against the yen, trading hands at ¥90.45
compared with ¥90.33 late on Thursday in New York.
- I-Net Bridge