Rand barely changed

Johannesburg - The rand was little changed from its noon levels in late afternoon trade on Wednesday amid a strong dollar, with a local trader saying the currency was getting resistance at 7.79.

At 15:45 the rand was bid at 7.7293 to the dollar from 7.6590 at its previous close. It was bid at 11.4425 to the euro from its previous close of 11.3395 and was at 12.6700 against sterling from 12.5329.

The euro was bid at $1.4814 from $1.4811 overnight.

"We saw the rand weaken yesterday on the back of the Medium Term Budget announcement yesterday, which sent it through the 7.70 resistance level," the trader said.

"The rand weakened through to 7.79, but hasn't broken that. We have seen a bit of dollar weakness against the majors. The dollar has weakened against the euro and pound and that is why we are seeing the rand a bit stronger.

"On the top side 7.79 will be the resistance level and we will get support at 7.70. We have figures in the US later on and we will take direction from there," he said.

Dow Jones Newswires reports the dollar is higher against the euro and lower versus the yen early on Wednesday, as risk aversion continues to hold sway amid concerns about the vigour of the US and global economic recovery.

Weakness in most global stock markets on Wednesday marked the latest ebbing of risk-taking across currencies and other asset classes.

"Equity market weakness - the strong inverse relationship between the dollar and risk appetite remains very much in play at the moment - is nearing some very sensitive levels and, with overseas stock markets in the red this morning, the risk of further risk-aversion driven trading appears high in the short term at least," said currency strategist Jacqui Douglas of TD Securities in Toronto.

The declines have been driven in part by data such as Tuesday's soft US consumer confidence figures, which undermined earlier optimism that the economic recovery was progressing smoothly enough to enable the Federal Reserve and other major central banks to begin tightening policy again.

Overnight, the further erosion of risk sentiment allowed the dollar to notch a fresh two-week high against the euro, although it has eased back slightly so far in the North American day.

The market will be bracing for any impact from the release of US September durable goods orders data, followed by September new home sales figures.

Meanwhile, a reminder that other parts of the global economy are preparing to unwind their credit crunch strategies came as India started to tighten its monetary policy on Tuesday.

- I-Net Bridge