The rand remained range bound in a quiet market in late afternoon trade on Tuesday, looking to the euro for direction in the absence of any market moving data.
“With little in the way of economic data, the rand is stuck in ranges and looking to the euro for direction. But the euro hasn't moved much either,” a local forex trader said.
At 15:40 local time, the rand was bid at R7.6600 to the dollar from Monday's close of R7.6419 and Friday's close of 7.6620. It was bid at R10.2040 to the euro from R10.1845 before, and at R12.2338 against sterling from R12.2391 previously.
The euro was bid at US$1.3319 from Monday's close of $1.3325 and Friday's close of $1.3372.
RMB analysts said in a morning report that they also expected range bound trade as the rand's peer group was also moving sideways.
“In the currency markets we have seen most of our compatriot currencies only track sideways, with the exceptions being the New Zealand and Canadian dollars which pushed stronger. The bottom line for the rand is that we're in a more positive environment but it's not clear if it's enough to get USD/ZAR below 7.60 today and whether we should start thinking about sub-7.50 multi-week,” it said
Meanwhile Dow Jones Newswires reported that the Australian dollar stuck out in an otherwise quiet European trading session Tuesday, dropping markedly after the country's central bank signalled that it may cut its key interest rate in the coming months.
The currency fell by almost a cent against the dollar after the Reserve Bank of Australia kept its cash rate target on hold at 4.25% but also suggested it will cut interest rates soon in response to moderating growth in China--the country's biggest trading partner.
The Japanese yen pushed up to a one-month high against the dollar in Asian hours, reflecting heavy buying by a Japanese trust bank, according to traders. But it fell back gradually in European hours to hover around the Y82 level against the dollar.
The euro held in a narrow range against the dollar, with traders largely ignoring news that an early indicator of inflation in the euro zone came in at the lowest since June 2010. Some market participants expect no currency movement until Wednesday's European Central Bank policy meeting. According to a Dow Jones survey, 47 banks and think-tanks unanimously expect the key interest rate to stay on hold, but some market watchers are hoping the central bank may signal a departure from extraordinary liquidity measures in its regular press conference. - I-Net Bridge
