After an initial blip weaker on the back of a softer euro, the South African rand steadied and was stuck in a narrow range against the dollar in a quiet market.
Currency traders said that everyone was waiting for the release of United States producer inflation data at 14.30pm, which would give the dollar direction.
At 11.38am, the rand was quoted at R6,1100 per dollar from an overnight close of R6,0651 and R6,1051 on Tuesday. It was quoted at R7,5368 to the euro from a previous R7,4867 and at R11,3030 against sterling from Wednesday’s R11,2690.
The euro was quoted at $1,2352 from $1,2384 late on Wednesday, while gold was quoted at US$404,00 an ounce from a previous $405,13/oz.
“The rand has been trading in very narrow ranges ahead of the figures out in the States at 14.30pm, which could give it a push — it is likely to just follow the euro’s move against the dollar,” a currency trader said.
He added that the rand’s initial move weaker was just on the euro breaking below $1,2360-$1,2350.
The rand tends to follow the euro because the Eurozone is South Africa’s largest trading partner.
The US PPI is expected to edge up by 0,1% m/m after May’s large 0,8% m/m gain, according to AFX.
The optimists point to the June import and export prices released on Wednesday, which showed m/m declines and believe that this should mean that June PPI should also show a m/m decline. — I-Net Bridge