The rand lost ground against the dollar in morning trade on Monday on the back of risk aversion, while emerging markets may come off further this week amid company earnings in the US, according to a local trader.

At 9.05am the rand was bid at 8.3290 to the dollar from its Friday night close of 8.2175. It was bid at 11.6050 to the euro from a previous 11.4600 and at 13.3938 against sterling from 13.3003.

The euro was bid at $1.3925 from $1.3947 on Friday.

A local trader said: "We are higher this morning against the dollar. Figures from the Michigan consumer index in the US on Friday came in worse than forecast, which sparked risk aversion.

"This week sees company earnings figures in the States, which may cast some doubt over whether a recovery can be sustained. Emerging markets might come off on the back of that," the trader said.

Said RMB analyst John Cairns in his morning report: "Having tested a high of 8.27 on Friday, USD/ZAR continues to trade within a broad range of 8.05 to 8.25. It is likely that the ZAR will remain suspended around the upper end of this range as investors continue to sell off risky assets.

"Fading risk appetite is evident in the latest Commodity Futures Trading Commission data, which shows that speculators have switched to net long positions in the JPY. This position should be sustained given the uncertainly over the global outlook, with US bank results and local US data, particularly retail sales, likely to rouse investors' concerns," Cairns said.

"However, this alone will not provide the impetus for the ZAR to weaken further. With little in the way of local or international data, we expect the unit to drift for much of the day," he added.

"The weaker ZAR is feeding into EUR/ZAR, which is expected to continue its upward assault. EUR/USD meanwhile is trapped at 1.39 and is unlikely to provide any support to the cross," Cairns said.

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