The South African rand continued to show strength against major currencies in late morning trade on Wednesday after testing the 6.30 per dollar level on Tuesday evening for the first time since February 2000.
Currency traders said that in addition to dollar weakness, the rand was benefiting from over-supply in the currency market as players moved to sell the greenback.
At 1142, the rand was quoted at 6,3061 to the dollar from a New York close of 6,3014 on Tuesday and 6,3586 on Monday. The rand was quoted at 7,6178 against the euro from a previous 7,6228 and at 10,9050 against sterling from Tuesday’s 10,9226.
The euro was quoted at $1,2096 from $1,2081 late on Tuesday in New York and $1,1978 late on Monday, while gold was quoted at $403,20 an ounce, unchanged from its previous close.
“Nothing has changed. The rand is still the flavour of the year,” a currency trade quipped.
He continued that in addition to firming on the back of a weaker dollar, the rand was also strengthening slightly against the crosses.
The trader said that after the rand’s move on Tuesday night, more dollars were being offered in the market by both local exporters and foreigners.
“There is no demand and over supply,” he asserted.
While the trader expected the rand to trade in a 6,28 to 6,34 range for the rest of the local trading day, he said it could once again firm further in after hours trade.
Earlier on Wednesday Econometrix Treasury Management market analyst George Glynos said that if the rand managed to sustain a break below 6,28 when New York came into the market, it could target 6,18-6,15. – I-Net Bridge