The rand is trading at R7.00 against the dollar in midday trade on Tuesday as traders eye euro for direction.
JANICE ROBERTS
Published: 2011/05/24 12:48:50 PM
The rand was steady against the dollar in noon trade on Tuesday as it eyed the euro.
"At the moment the euro is looking well-bid, and it's this and good commodity prices that are keeping the rand steady," a local rand trader said.
"We had German data out this morning and this helped the euro along even more - but this is short term and we need to see how it plays out," he added.
At 11:37 local time, the rand was bid at R7.0037/$ from its previous close of R7.0040/$. It was bid at R9.8673/€ from R9.8570/€ before and at R11.2842/£ from R11.2917/£ at its previous close.
The euro was bid at $1.4103 from $1.4033 before.
Standard Bank 's currency strategist, Michael Keenan, confirmed in a note on Tuesday that the rand's performance remained a function of the euro's movements against the dollar.
"The rand weakened yesterday in sympathy with euro depreciation; it then stopped weakening the moment the euro recouped some ground against the dollar."
Meanwhile, Dow Jones Newswires reported that, in the foreign exchange markets, the euro received a boost from Germany's Ifo survey, but remained vulnerable to declines as concerns over the eurozone sovereign debt crisis persisted.
German business confidence held steady in May near a record high set in February, beating analysts' forecasts and maintaining pressure on the European Central Bank (ECB) to raise interest rates again soon.
"The business cycle traffic lights still signal 'green'," said Ifo president Hans-Werner Sinn.
Ifo's closely watched business climate index came in at 114.2, matching the April reading and above a consensus forecast of 113.7 by analysts polled ahead of time by Dow Jones Newswires.
The measure previously hit a record high of 115.4 in February after nine months of successive increases.
"The German economic miracle keeps going," said Christian Schulz, senior economist at Berenberg Bank in London.
