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Johannesburg - The rand was trading slightly stronger against the dollar in midday trade on Wednesday following improved confidence out of Germany and consumer price index (CPI) figures for January coming in below expectations.
“Yesterday’s recovery was aided this morning by foreign buying of high yielding assets‚ such as the rand‚” said Mark Kalkwarf‚ a senior portfolio manager at the Iquad Group.
“Encouraging data out of Germany where the ZEW confidence index jumped from 31.5 to 48.2‚ also provided an impetus for the ‘risk on’ scenario‚” he said.
Kalkwarf said this was the highest level of confidence since April 2010.
South Africa’s CPI which the Reserve Bank uses to target inflation- came in below expectation at 5.4% year on year in January‚ after measuring 5.7% year-on-year (y/y) in December.
The inflation rate was expected to have come in at 5.7% y/y‚ according to a survey of leading economists by I-Net Bridge.
At 11:46‚ the rand was bid at R8.8449/$ from Tuesday's close of R8.8521 and Monday’s close of R8.8830.
The local currency was bid at R11.8711/€ from its previous close of R11.8527 and at R13.5542 against sterling from R13.6475 before.
The euro was bid at $1.3424 from $1.3394 at Tuesday’s close.
