The rand was bid at R8,0960 to the dollar from an overnight close of R8,1415 and overnight levels of over 8.20. It was bid at R11,3128 to the euro from a previous R11,3044 and at R13,1405 against sterling from
R13,0555. The euro was bid at $1,3993 from $1,3902 overnight.
A local trader said: "The dollar is having another bad day today, and the rand is stronger on the back of that." Dow Jones Newswires reports that the dollar is trading with a softer tone early today, with the rally set off following Friday's upside surprise in US May employment data showing signs of ending. After receiving support over the last two days from optimistic projections of US economic recovery and a faster turn toward higher US interest rates, the dollar has recently slipped back decisively from recent
highs.
More risk-sensitive currencies were able to stabilise late yesterday after the reversal from earlier weakness for US equities, and that improvement has carried over into Tuesday despite a mixed performance for stock markets in Asia and Europe. The euro has managed to move higher despite disappointing German April trade statistics and also industrial production figures for the same month.
Now, with only a few major US economic releases due in the balance of the week, attention is beginning to turn to this coming weekend's meeting of finance ministers from the Group of Eight nations in Italy, leading to a more even and corrective tone for major currencies than has been seen in recent days. "The markets are likely to test the US dollar's downside today after the currency's recent rally," said currency strategists at Brown Brothers Harriman in New York, terming both the euro and pound sterling as having
fallen into oversold territory after recent sharp downward movements.
Pound sterling was the big mover in the European trading session, climbing steadily against the dollar. A meeting between Prime Minister Gordon Brown and his members of Parliament late on Monday appears to have secured his political future for now at least, easing political uncertainty and boosting the pound. In addition, fresh UK housing data were stronger than expected, as the Royal Institute of Chartered Surveyors said sentiment in the housing market in England and Wales had recovered to the strongest level in 18 months. New-buyer inquiries rose at the fastest pace in a decade, the survey showed.
Early today, the euro was at US$1.3990 from US$1.3903 late yesterday and was fetching Y136.64 from Y136.85 versus the yen. The dollar was at Y97.66 from Y98.42, according to EBS. Pound sterling was at US$1.6220
from US$1.6057, and the dollar was at CHF1.0845 from CHF1.0913 yesterday.
