The South African rand was looking relatively steady against the dollar in early trade on Tuesday after rallying to its best level since September 2000 in thin London trade on Monday.
While the rand had retreated from this level in New York overnight on the back of the weaker euro, it remained firmer than when South African financial markets closed for the long weekend on Friday.
At 0853, the rand was trading at R7,1950 to the dollar from a New York close of R7,1892 on Monday and R7,2145 on Friday. It was quoted at R11,4625 against the sterling from a previous close of R11,4062 and Friday’s R11,5010.
The euro was quoted at $1,0967 from Monday’s New York close of $1,0982, while gold was quoted at $332,70 an ounce from a previous $334,10/oz.
South African financial markets were closed on Monday in celebration of Freedom Day.
“The rand seems stable now after yesterday when it strengthened to R7,05 to the dollar in London,” a currency trader said. “It is slightly weaker due to the euro losing ground against dollar.”
The trader said that the same pattern that has been seen recently.
“The market seems to want to sell dollars into any up move. We might see the rand in the R7,20s first, with more strength later in the day.”
Dow Jones Newswires reports that having come within shouting distance of a fresh four-year low early in the global session, the dollar staged a mini-rally on Monday taking heart from surging stocks and pushing the euro back below the important $1,10 barrier.
Although many analysts continue to predict a strengthening euro, the currency seems to be experiencing difficulty staying above the $1,1000 level. Some financial professionals contend that a break may be harder to maintain in the long term, particularly if stocks extend their gains.
The Dow Jones Industrial Average gained 2%, while the Nasdaq Composite ended up 1,9%. – I-Net Bridge