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Rand weaker as foreigners sell bonds

May 29 2013 13:11
I-Net Bridge
Johannesburg - The rand continued to lose ground against the dollar on Wednesday as foreigners sold local bonds in response to Tuesday’s worse than expected gross domestic product (GDP) figures.

“We’re seeing a combination of things pressuring the rand today. The big thing was the GDP numbers yesterday which were a shocker and turned the market significantly because they will have a big effect on our trade balance. It might also force Gill Marcus’s hand and press her into a rate cut‚” said Tony van Dyk‚ a currency dealer at the Iquad Group.

Seasonally adjusted and annualised GDP grew by 0.9% in the quarter‚ well below forecasts of a 1.9% rise‚ and falling short of fourth-quarter growth of 2.1%.

“Foreigners have also been net sellers of bonds‚ commodity prices are down‚ fears over unsecured lending‚ and labour woes are ongoing. The euro also came off quite sharply‚ which affected the rand‚” he said.

At 11:35‚ the rand was bid at R9.8370/$ from R9.7801 at Tuesday’s close and R9.6099 at Monday’s close.

The local currency was bid at R12.6781/€ from its previous close of R12.5710 and was at R14.8027 against sterling from R14.7012 at its previous close. The euro was bid at $1.2889 from $1.2854 at Tuesday’s close and $1.2929 at Monday’s close.

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