OWN CORRESPONDENT, Johannesburg | Wednesday 3.00pm.
THE rand continued firming against the dollar on Wednesday after its intraday worst level of R6,53 to the US currency.
Dealers said the local currency was tracing the euro to range around the crucial R6,50 mark by mid-afternoon.
Dealers also said investors remain bullish about the rand’s prospects, despite the slide in the currency since last week. It fell by more than 10 cents on Friday after Reserve Bank Governor Tito Mboweni indicated that interest rates are likely to rise, not fall, in the next few months.
Analysts were however quick to point out that the slide was also due to a strengthening of the dollar, which has affected currencies worldwide.
“While the rand has dropped 5,5% against the dollar this year, the Australian dollar has dropped 9,5%,” said Jac Laubscher, chief economist of Gensec Assets Management.
Dealers said a slight correction on the euro helped ease the squeeze created by dollar demand on Wednesday morning, following a weaker Dow Jones overnight. On Tuesday the Dow fell 3,6%.
At 3pm the euro was trading at euro 6,20 to the dollar, slightly stronger than Tuesday.