The South African rand surged to multi-month best levels against most of the major currencies on Thursday, buoyed by a number of factors and stop-losses.
The rand firmed to a two-year-best level against the dollar of 7,76 and to almost 18-month best levels of 8,3587 and 12,1328 respectively against the euro and sterling (British pound).
At 1200, the rand was trading at 7,7750 to the dollar from a New York close of 7,9275. It was 21 cents stronger against sterling at 12,1570 from Wednesday’s close of 12,3729 and at 8,3733 to the euro from a previous 8,5142.
Thursday’s levels were the best against the dollar since March 2001, against the euro the best since October 2001 and against sterling the best since August 2001.
“There are a number of factors supporting the rand at the moment. Firstly, stop-losses were triggered through the 7,86 per dollar level yesterday. Also, the euro and gold are slightly firmer, with the dollar marginally softer across the board.
“There’s also some talk about FDI (foreign direct investment) in the establishment of an aluminium smelter at Coega (on the Eastern Cape coast) as well as rumours that S&P is going to upgrade South Africa fairly shortly.
“So these factors have all had a positive effect on the rand and the next technical level for the local currency is likely to be 7,65,” a local currency trader said.
After weakening above the R8 per dollar level earlier in the week, the rand moved back below the figure on Wednesday and then, with stop losses being triggered, moved below the 7,80 per dollar level.
The euro was quoted at $1,0773 from $1,0768 late on Wednesday and $1,0719 late on Tuesday in New York, while gold was quoted at $325,10 an ounce after touching $327,38 earlier Thursday. It closed at $326,70 on Wednesday and $322,80/oz on Tuesday. – I-Net-Bridge