The rand was a touch firmer in quiet early trade on Wednesday‚ after US retail sales boosted the US dollar in late trade on Tuesday.
“We are still reacting to the better than expected US retail sales data released yesterday‚” a local trader said.
At 8.50am local time the rand was trading at R8.1752 to the dollar from Tuesday’s close of R8.1892 and Monday’s close of R8.1491. It was trading at R10.0842 to the euro from its previous close of R10.0902 and at R12.8041 against sterling from R12.8354 before.
The euro was bid at US$1.2336 from $1.2320.
RMB said in its morning report that the rand continued to drift weaker but there was nothing to suggest this would extend into a major trend.
“The USD/ZAR pair needs to find a top‚ maybe in the mid-8.20s‚ and‚ combined with last week’s floor down at 8.06/10‚ we can establish a range that could contain most trade for the next few quiet weeks‚” the bank said.
“The rand is catching a cold wind from the Aussie dollar. Failure to break AUD/USD 1.06 has resulted in a temporary speculative position unwinding that has filtered into the other high-yielding and commodity currencies. The increase in food prices that contain China’s ability to ease monetary policy has provided a rationalisation‚” it said.
“Global data have been good. This is the first time in months that we can make this statement. This doesn’t mean global growth is picking up strongly again‚ simply that we are starting to receive some confirmation that things are stabilising.
“Eurozone gross domestic product contracted 0.2 percent in the first quarter of 2012‚ with Germany performing slightly better than expected and France narrowly avoiding a slip back into recession. Conditions remain dire in the south.
“US retail sales jumped a much larger than expected 0.8 percent month on month in July. This is the first increase in four months‚” it said.
“On today’s calendar there is US consumer price index‚ industrial production and housing prices — all relatively important but unlikely to generate significant movements in this Northern Hemisphere summer lull‚” it concluded.
Bonds soft on global data and oil price
South African bonds were softer in early trade on Wednesday as better than expected US retail data saw global capital markets weaken.
At 9.10am‚ the benchmark R157 bond was trading at 5.715 percent from Tuesday’s close of 5.670 percent and Monday’s close of 5.660 percent‚ the R207 was bid at 6.750 percent and offered at 6.720 percent from its previous close of 6.680 percent and the R186 was bid at 7.535 percent and offered at 7.525 percent from its previous close of 7.480 percent.