The rand remained strong against all major currencies on Wednesday amid risk taking and expectations over the Bharti/MTN deal, according to a local based trader.
At 15:45 the rand was bid at 7.7528 to the dollar from its overnight close of 7.7925. It was bid at 10.9814 to the euro from a previous 11.0604 and at 12.6988 against sterling from 12.7985.
The euro was bid at US$1.4173 from US$1.4214 overnight.
A local trader said: "We are a bit firmer on the crosses today having reached a few technical levels yesterday, including 7.85-87. We are now looking at 7.65-67 against the dollar as the next key level. If we can reach that we might push on to 7.20, but I don’t think that will happen, unless something like the Bharti/MTN deal is announced.
"The big driver today has been people taking on more risk.
"The MTN/Bharti deal is also on everyone’s minds, and there seems to be positive sentiment around that deal which is helping the rand," the trader said.
Dow Jones Newswires reports that the euro fell to session lows against the dollar after the open of US stocks trading.
The Dow Jones Industrial Average dropped on wavering sentiment, after the release of some disappointing second quarter earnings reports following a string of stronger company filings.
The dollar is considered a safe-haven asset, and usually gains against the euro during periods of uncertainty.
While stock moves will likely direct currency movement for the rest of the session, traders will be paying attention to the second day of Federal reserve Chairman Ben Bernanke’s testimony to Congress.
Morgan Stanley’s shares dropped after reporting that second-quarter income plunged 87% on charges related to mergers and its repayment of government funds and weakness at its wealth-management and institutional securities businesses. Wells Fargo & Co’s shares were also sold on reported mounting loan troubles, despite an 81% rise in earnings last quarter.
