AFTER slumping to a worst level in six years yesterday in extremely volatile conditions, the rand was back below the 10 rand per dollar level in early trade today. US stocks staged a late comeback with the Dow Jones Industrial Average closing up 401,35 points, or 4,68%, to 8979,26, recovering more than half its 733-point loss from Wednesday.
The Dow is up 6.3% for the week after a record point gain Monday. The broad Standard & Poor’s 500 added 38,59, or 4,25%, to 946,43, for its fourth biggest percentage increase this year a session after its biggest plunge since October 19, 1987. The technology-oriented Nasdaq Composite rose 89,38, or 5,49%, to 1717,71, its second biggest percentage gain of the year, Dow Jones Newswires reports.
In Asia this morning, the Nikkei is up 2,8%
In early trade the rand was bid at R9,9720 to the dollar from a previous close of R10,0560. It was bid at 13.4328 to the euro from a previous R13,5903 and at R17,2875 against sterling from R17,4282 before.
The euro was bid at $1,3483 from $1,3480 overnight, while gold was quoted at $814,80 a troy ounce from US$805.00/oz overnight. RMB analysts said in their morning report that Asian stocks are staging a cautious recovery this morning, which means that the rand could move stronger, with the next key level to break at R9,80, but a reversal in sentiment will see
the rand heading back towards R10,65.
Dow Jones Newswires reports that the euro rose slightly against the U.S. currency on what some traders said was buying by Russia’s central bank. But analysts maintained that the common European currency remains in a downtrend.
Yesterday, the dollar was higher against the euro despite more recession-like U.S. economic data, as a drop in oil prices led investors to quit bets on commodities and return to the refuge of the U.S. currency.
But a late afternoon rally in U.S. stock markets reversed much of the safe-haven buying of the dollar, leaving the greenback only modestly higher against the common currency from day-earlier levels.
"Oil and commodity prices continue to slide during this latest bout of financial turmoil and is the only silver lining behind the current global
recession fears," said Win Thin, currency strategist at Brown Brothers Harriman. "Lower commodity prices are great for the consuming nations."
Today, analysts will keep an eye out for a raft of second-tier U.S. data,
starting with September housing starts and building permits. That will be
followed by an October report on consumer sentiment from the University of
Michigan and Reuters.
