LUKE BAKER, Johannesburg | Thursday 12.40pm.
THE rand fell to a new record low against the dollar on Thursday, undermined by a fresh weakness in the euro.
The currency traded briefly at $7,18 to the dollar, breaching its previous record low of R7,17 reached on May 10, before recovering slightly to stand at R7,16 at around 11pm.
Traders said the move have been exacerbated by thin volumes and skittish trading conditions which have recently seen the spread between the bid and offer price widen to two cents from around half a cent normally.
There is also wariness ahead of the central bank’s decision on interest rates on Friday at the end of its two-day monetary policy meeting, although a poll shows that few economists believe a change in rates is imminent.
”The bonds have sold off and euro-dollar is still weak, both of which are having an impact, but mostly it’s a total random move in dollar/rand right now,” said a trader at Deutsche Bank in Johannesburg.
The rand has lost 15% of its value against the dollar this year due to a combination of factors including euro weakness, negative foreign sentiment towards southern Africa following months of political violence in neighbouring Zimbabwe and pure dollar strength.
The euro — which is the main currency in the rand’s trade-weighted basket — was trading a touch weaker against the dollar on Thursday, buying 89,35 US cents, about one cent above its record low of 88,44 touched on May 4. — Reuters