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Johannesburg - The local currency traded slightly firmer late on Wednesday as the dollar weakened after the release of a disappointing US first quarter GDP print.
The final reading for first quarter showed that US GDP growth was at 1.8%‚ versus a previous estimate of growth of 2.4%.
“This number was rand supportive after the dollar lost traction on the softer US numbers‚” said Mike Keenan‚ currency strategist at Absa Capital.
At 16:07 the rand was bid at R10.0619/$ from Tuesday’s close of R10.1002.
The local currency was bid at R13.1205/€ from its previous close of R13.2113 and was at R15.4773/£ from R15.5709 at its previous close. The euro was bid at $1.3037 from $1.3080 at its previous close.
“Not too much happened today in the forex market. When it comes to the rand we are still caught in a situation of investors expressing their risk aversion and we are still seeing money flowing out of the bond market‚” Keenan said.
“The rand is still vulnerable to the exodus of money out of emerging markets in general as a result of concerns about monetary easing tapering in the US and fears surrounding Chinese monetary tightening and lower growth there.
"The rand is vulnerable to these two headwinds and is oscillating around the psychological R10/$ handle‚ with a weakening bias‚ as there is still a lot of nervousness in the forex market‚” he said.
“Domestic factors driving the rand have settled down. There are still labour tensions simmering‚ but global factors are at the forefront‚” Keenan said.
The final reading for first quarter showed that US GDP growth was at 1.8%‚ versus a previous estimate of growth of 2.4%.
“This number was rand supportive after the dollar lost traction on the softer US numbers‚” said Mike Keenan‚ currency strategist at Absa Capital.
At 16:07 the rand was bid at R10.0619/$ from Tuesday’s close of R10.1002.
The local currency was bid at R13.1205/€ from its previous close of R13.2113 and was at R15.4773/£ from R15.5709 at its previous close. The euro was bid at $1.3037 from $1.3080 at its previous close.
“Not too much happened today in the forex market. When it comes to the rand we are still caught in a situation of investors expressing their risk aversion and we are still seeing money flowing out of the bond market‚” Keenan said.
“The rand is still vulnerable to the exodus of money out of emerging markets in general as a result of concerns about monetary easing tapering in the US and fears surrounding Chinese monetary tightening and lower growth there.
"The rand is vulnerable to these two headwinds and is oscillating around the psychological R10/$ handle‚ with a weakening bias‚ as there is still a lot of nervousness in the forex market‚” he said.
“Domestic factors driving the rand have settled down. There are still labour tensions simmering‚ but global factors are at the forefront‚” Keenan said.
