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Johannesburg - The rand was firmer at noon on Thursday with
no real reaction yet to the latest news that striking SA gold miners had
rejected the latest wage offer by employees.
At 11:59am‚ the rand was bid at R8.7129 to the dollar from
Wednesday’s close of 8.7328‚ Tuesday’s close of R8.74513‚ Monday’s worst level
of R8.9945 and Monday’s close of R8.8855.
It was bid at R11.2254 to the euro from its previous close
of R11.2243‚ and at R13.9454 against sterling from R13.9741 before.
The euro was bid at $1.2885 to the dollar‚ from $1.2853 at
Wednesday’s close.
On Wednesday the rand managed to consolidate Tuesday’s
recovery‚ but there was still a lot of indecision in the market due to
conflicting developments‚ said Absa Capital in a note.
“On the on hand‚ SA Reserve Bank Governor (Gill) Marcus reiterated
on Wednesday that the Reserve Bank would not try to intervene in the rand
market‚ such as sell reserves to support the currency‚ while simultaneously
expressing increased concern about the growth outlook‚ which keeps the door
open to the possibility of a policy rate cut. Hence‚ on two fronts‚ the
governor’s comments yesterday were not rand supportive‚ and the rand
accordingly weakened‚” the bank said.
“On the other hand‚ Finance Minister (Pravin) Gordhan expressed
optimism that the rand would bounce back from the strike-induced sell-off of
recent weeks‚ which has helped the rand to firm back up to the day’s opening
levels‚” it said.
“We remain of the opinion that the bias remains in favour of a weaker rand due to SA’s lingering strike activity and thus we still do not expect the rand to recover beyond the R8.60/dollar to the downside. Specifically‚ more striking workers were fired yesterday and municipal workers are still on track to strike as early as this week‚” the bank added.
