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Rand weakens on dollar strength

Jan 07 2013 09:22
I-Net Bridge

Johannesburg – The rand weakened against the US dollar on Monday morning as traders reacted to comments from the US Federal Open Markets Committee (FOMC). 

“While the skirting of the US fiscal cliff caused high-beta currencies such as the rand to enjoy a relief rally at the year’s outset‚ the dollar has since strengthened on the back of the release of some hawkish FOMC minutes‚” Absa Capital said in a note. 

At 8.27am‚ the rand was bid at R8.6043 to the US dollar from its previous close of R8.5549 on Friday. The local currency was bid at R11.2133 to the euro from its previous close of R11.1773 and at R13.7750 against sterling from R13.7532 before. 

The euro was bid at $1.3034 from its overnight close of $1.3067. 

“Our month-end target still stands at R8.60/$ and we also still believe the rand could strengthen to R8.20/$ by year-end‚ partly because the worst of the idiosyncratic risks (strike activity‚ political uncertainty surrounding the elective conference‚ current account deficit) that plagued it during the fourth quarter of 2012 are likely to be behind us and also because the improving growth outlook in the US and China should be supportive of risk appetite as the year progresses‚” the bank said.

 

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