The rand was relatively range-bound in midday trade on Friday‚ ahead of the US second quarter gross domestic product (GDP) data this afternoon.
“If the (US) data surprises on the upside‚ we could see a rise in commodity prices which would be rand supportive‚” said Henry Flint‚ head of research at Thebe Stockbrocking. “However‚ if the data disappoints‚ the immediate reaction might be negative‚ although this will reinforce expectations for the US Federal Reserve‚ which is convening next week‚ to take supportive measures for the US economy.”
At 11:58 local time the rand was bid at R8.2567 to the dollar from Thursday’s close of R8.2389 and Wednesday’s close of R8.3973. It was bid at R10.1327 to the euro from its previous close of R10.1236 and at R12.9715 against sterling from R12.9323 before.
Gold was trading at US$1620.64 per ounce.
The euro was bid at US$1.2270 from Thursday’s close of $1.2280 and Wednesday’s close of $1.2147.
Absa Capital said in a note that the rand had benefited more than most currencies from Thursday’s relief rally of risky assets.
“We see scope for more rand short-covering into the weekend‚” the bank said.
“Global sentiment improved dramatically on Thursday due to suggestions from the European Central Bank that it stood ready to do whatever was needed to keep euro members in place; better than expected US labour data; and encouraging US consumer spending data.
“All of these developments have reduced some of the dollar’s safe-haven allure and caused commodity prices to surge‚” it said.
Bonds slip on Marcus comments
South African bonds slipped in midday trade on Friday after South African Reserve Bank governor Gill Marcus said further monetary easing after last week’s rate cut was not automatic.
“I think the governor’s comments resulted in a reality check as the bond market may have run ahead of itself‚” a local trader said.
At 11:47 the benchmark R157 bond was trading at 5.390 percent from Thursday’s close of 5.350 percent and Wednesday’s close of 5.380 percent. The R207 was bid at 6.415 percent and offered at 6.385 percent from a previous close of 6.400 percent and the R186 was trading at 7.200 percent from its previous close of 7.250 percent.
At the end of May the R157 closed at 6.390 percent‚ the R207 at 7.645 percent and the R186 at 8.375 percent.