The South African rand was steady against major currencies in late trade on Thursday, amid mixed flows throughout the day.
At 4pm, the rand was trading at R7,3450 to the dollar — unchanged from the New York close. It was trading at R7,9755 to the euro from a previous R7,9810 and at R11,5680 against sterling from Wednesday’s R11,5335.
The euro was quoted at $1,0870 from $1,0868 late on Wednesday in New York, while gold was quoted at $369,70 an ounce from a previous
$372,55/oz.
“We saw exporters just before lunch and in the last hour some import demand has taken the currency off the R7,30/R7,31 level,” said a trader.
“Importers have been happy around R7,30 to R7,31 and exporters were active at around R7,36 to R7,37,” he added.
He said the outlook remained fairly stable and the rand would have to close below R7,28 or above R7,42 for it to move out of its recent range.
Looking ahead to Friday, the market will be watching July money supply and private sector credit extension numbers, due for release at 8am, and the July trade figures, due at 2pm. The latter are often volatile and difficult to predict.
South Africa’s trade balance with its non-Southern African Customs Union trading partners is expected to come in at a median forecast of a R1,5-billion surplus in July, with a range from a R500-million surplus to a R4-billion surplus. This is a drop on June’s surprise R3,301-billion surplus.
Dow Jones newswires reports that the dollar is on a firm footing in early New York trade, although it has showed only a muted reaction so far to broadly positive United States economic data released a short while ago.
While still stronger against European currencies compared with late Wednesday levels in New York — and steady against the yen — the dollar is beginning to dip on profit-taking.
The latest weekly jobless-claims numbers and revised second-quarter gross domestic product data came in better than expected. But the good news seems to have been priced in.
“Everyone had expected good numbers and the whole market had the same position,” said Thomas Malloy, trader at Bank Leumi in New York, explaining why the dollar is retreating from levels immediately before the figures were released.
“The market was well short of euros, and there’s nothing left to push it [the dollar] up because everyone had already bought their dollars,” Malloy said.
However, the euro remains under pressure from heavy selling against the yen, with the latest weekly flows data from Japan’s Ministry of Finance showing that net purchases of Japanese stocks and bonds are increasing from already high levels. — I-Net Bridge