The South African rand was steady against major currencies in late afternoon trade on Monday in a quiet market. Currency traders said that the local unit’s firming trend was still intact and saw it targeting R6,30 later in the week.
At 4.06pm, the rand was quoted at R6,3908 to the dollar from a New York close of R6,3653 on Friday and R6,4277 on Thursday. It was quoted at R7,6694 against the euro from a previous R7,6611 and at R11,0296 against sterling from Friday’s R11,0046.
The euro was quoted at $1,2009 from $1,1975 late Friday in New York and $1,1907 late on Thursday, while gold was quoted at $401,15 an ounce from a previous $398,35/oz.
“The rand has done very little — it has basically been trading in a R6,3850 to R6,4150 range. It refused to follow the euro at first but then, when New York came in, the rand strengthened a bit. It should strengthen even more when our market closes, but tomorrow morning we will buy up dollars again,” a currency trader said.
He continued that he expected the rand to trade in a R6,35 to R6,41 range overnight.
The trader asserted that the trend still pointed towards a firmer rand. He saw the local unit targeting R6,30 — a level last seen in late February 2000 — later in the week.
Dow Jones Newswires reports that the dollar was recovering from fresh all-time lows against the euro and five-year lows against the pound early on Monday in New York, as the market awaited a key United States data release.
When it’s released later in the morning, the Institute for Supply Management’s purchasing manager survey for November is forecast to show an improvement to 59,0 from 57,0 the month before.
While the dollar could get some support from strong US data due out Monday, the recent trend has been buying the euro on dips.
“The euro seems to be king right now, so we’re still in a buy-on-the-dip mentality,” said Grant Wilson, senior foreign-exchange trader at Mellon Bank in Pittsburgh.
He said that if the euro falls to around $1,1950 or $1,19, “there are going to be buyers to suck up the euro”.
Overnight, the dollar’s slide carried over from late last week. The euro rose to a record high around $1,2040, while sterling hit $1,7275, its highest level since 1998. — I-Net Bridge