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Johannesburg - The rand remained in
a tight range in the afternoon session on Wednesday, tracking the dollar
performance against the majors for any clear direction.
At 15:44 the rand was bid at 7.3852 to the dollar from 7.3777 at its
previous close. It was bid at 10.0656 to the euro from its previous close of
10.0385 and was at 11.0310 against the sterling from 11.0626.
The euro was bid at $1.3598 from $1.3605 previously.
A local currency trader said: "The rand continues to trade in a range of
7.36-46 against the dollar, and we really need to break through those levels
on either side, to see any action.
"The rand will track the dollar's performance against the majors for
direction."
The violent swings in the rand have done more damage to the economy than
its absolute level, Malcolm Charles, fixed income portfolio manager at
Investec Asset Management, said on Wednesday.
For the sake of businesses in South Africa, Charles said Government
should focus its efforts more on ways in which to stabilise the local
currency than debate the virtues of weakening or strengthening it to a
perceived "appropriate" level.
It follows comments from managing director of the IMF, Dominique
Strauss-Kahn, who said that artificially weakening the rand would be a "very
short-sighted" move for South Africa to make.
Strauss-Kahn stressed the importance of maintaining investor interest in
South Africa, citing a weaker rand as a possible deterrent to capital market
inflows.
"We would argue that the whole debate has been misplaced. While everyone
is getting carried away by the absolute level of the rand, we believe it is
the extreme volatility of our currency that is doing far more damage to our
economy," Charles said.
Dow Jones Newswires reported that in the European foreign exchanges,
currencies traded in tight ranges Wednesday as investors looked for fresh
impetus. At 12:05 GMT, the euro was quoted at $1.3623, up from $1.3602 in
late New York trade Tuesday. The dollar was trading at ¥90.35 up from
¥89.97.
European investors will continue to keep a close eye on the Greek debt
situation, after the country's prime minister met US President Obama on
Tuesday, reiterating the fact that Greece was not asking for financial help
from anyone.
- I-Net Bridge