The South African Rand traded between 8.18 and 8.58 to the US Dollar during the period between 25 and 29 June 2012. The Rand also traded between 13.02 and 13.19 to the British Pound during the same period.
The Rand weakened in line with other commodity currencies at the start of the week amid concerns about faltering global growth and scepticism that another European Union summit this week will offer any respite for the debt-ridden region.
“The Rand is being held hostage by the Euro‚ with the euro dropping quite a bit‚” a local trader said.
The Rand firmed in early trade on Tuesday, getting temporary relief against the Dollar as investors preferred to stay out of the market due to coming policy meetings at home and abroad, the Rand was once again firmer during midweek trade as foreign investors were choosing the Rand over the Euro ahead of the European Summit.
“We are seeing good foreign demand as well as exporters repatriating before the June month-end‚ so we expect the Rand to strengthen into the weekend‚” a local trader said.
The Rand rallied through resistance levels against the Dollar early on Friday, as positive news out of the Euro Summit propelled investors back into riskier assets after a week of nervousness.
European leaders boosted markets by taking unexpected decisions such as lowering Spanish and Italian borrowing costs
“We’ve seen very aggressive demand for our local bonds which will help keep our currency better supported,” said Howes.
At the start of trade on Monday, the rand briefly touched a one-and-a-half week high against the dollar but looks unlikely to rally much further as uncertainty remains over Europe’s liquidity problems.
On the local front, the June purchasing managers’ index due out at 9am GMT should offer the latest pointers on the state of South Africa’s economy, with some market players now pricing in the chance of an interest rate cut later in the year to boost growth.
GBP / ZAR: 12.79
EUR / ZAR: 10.31
USD / ZAR: 8.17
Correct at 9am UK time 2 July 2012
Note: The above exchange rates are based on “interbank” rates.
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