The rand was drifting lower at noon on Thursday on the back of a weaker euro‚ playing catch-up with a weaker dollar and due to worries about local mining issues.
“The violence at Lonmin is affecting the rand negatively‚ because investors are worried that violence could spill over to other mines‚ which could reduce exports‚ which would be negative news for the rand‚” a local trader said.
Rand Merchant Bank said in a note that the dollar/rand had pushed up to R8.25 and “we continue to believe the market should top out around here”.
“The euro/dollar has already settled down. More importantly our compatriot currencies have started to adjust stronger again and the rand should be pulled along in their wake‚” the bank said.
At 12.03pm local time the rand was bid at R8.2593 to the dollar from Wednesday’s close of R8.2140. It was trading at R10.1262 to the euro from its previous close of R10.0884 and at R12.9508 against sterling from R12.8809 before.
Gold was trading at US$1604.07 per ounce.
The euro was bid at US$1.2270 from $1.2281.
Bonds recover despite softer rand
South African bonds recovered from their early morning weakest levels to be little changed in midday trade on Thursday.
“The price action is a bit surprising given that the rand has moved weaker‚” a local trader said.
At 11.52am‚ the benchmark R157 bond was trading at 5.670 percent‚ the same as Wednesday’s close. The R207 was bid at 6.745 percent and offered at 6.715 percent from its previous close of 6.740 percent and the R186 was trading at 7.570 percent from its previous close of 7.560 percent.