Rand weaker on dollar strength
Johannesburg – The rand was weaker on Thursday at noon due to a stronger dollar with market participants awaiting the SA Reserve Bank’s monetary policy committee (MPC) rate announcement this afternoon‚ with no cut expected.
At 11:47 local time‚ the rand was bid at R8.3420 to the dollar from R8.2671 at Wednesday’s close. It was bid at R10.7970 to the euro from its previous close of R10.7804 and at R13.4879 against sterling from R13.4090 before.
The euro was bid at $1.2943 from $1.3048 at Wednesday’s close.
“The euphoria behind a third round of quantitative easing (QE3) is wearing off and the rand remains in ranges. The euro-rand is not moving‚ so the weaker rand is very much a dollar move‚” said Jim Bryson‚ currency trader at Rand Merchant Bank.
“The market is not expecting a rate cut and the MPC announcement will have a muted effect on the rand‚” he added.
Standard Bank said in a note that it maintained its view for the Reserve Bank to keep rates on hold today‚ leaving the repo rate at 5%.
“We expect that the bank will leave the door ajar to the possibility of further easing‚ but could strike a slightly less dovish tone compared with July. This could adversely impact the discounted probability of monetary easing within four to six months‚ which currently sits at just above 50%‚ which would‚ in turn‚ be rand supportive‚” the bank said.