OWN CORRESPONDENT, Johannesburg | Friday 4.00pm.
THE rand lost some of its earlier ground gained on Friday, and despite a stronger euro weakened to R7,16 by late afternoon trade.
At the same time markets did an about-turn on Thursday’s gains.
By 11am the currency was trading at R7,13 to the dollar, off the back of a stronger euro overnight.
By close of play the overall was 0,33% or 24 points down. Financials finished 0,57% or 51 points up, with gold shares closing 0,54% or 5 points in positive territory.
However all other counters ended lower, industrials 1% or 79 points down, with resources 0,26% or 13 points down.
By late afternoon gold was trading at $271,55 an ounce on international markets.
The rand’s volatility follows Thursday’s slide to a fresh record low of R7,20 to the dollar, hit by a combination of fresh concern over developments in Zimbabwe, inflation fears and euro weakness.
Analysts however agree with President Thabo Mbeki’s statement two weeks ago that the fall of the rand has more to do with strength of the dollar than with the Zimbabwean crisis.
Econometrix analyst Tony Twine said only 3% to 4% of the currency’s fall this year can be attributed to the Zimbabwean situation.
He pointed out the fall of the rand is on a par with that of the Australian dollar and the euro, and that it is absurd to suggest a link between the Zimbabwean crisis and any weakness in those two currencies.
Traders said the currency, which has lost more than 15% of its value against the dollar so far this year, could sink even lower after the US market opens. Offshore players have been the main drivers of negative sentiment recently.
In Asia, the Nikkei finished 1,48% or 239 points down, with the Hang-Seng 1,42% or 198 points lower. By late afternoon the Dow Jones was trading 0,40% or 41 points off.