The rand strengthened in the late morning on Friday as traders reacted to better-than-expected global data and local factory inflation numbers from Thursday.
“There is no data out today‚ so we are not expecting major movements from the rand. Yesterday saw better-than-expected UK GDP data which boosted emerging markets‚” said Mark Kalkwarf‚ a senior portfolio manager from the Iquad Group.
He added that yesterday’s producer inflation data indicated that consumer inflation could abate in the next couple of months.
At 11.26am‚ the rand was bid at R8.7432 to the US dollar from Thursday’s close of R8.7755. It was bid at R11.3151 the euro from its previous close of R11.3750 and at R14.0843 against sterling from R14.0618 before.
Gold was trading at US$1704.45 per ounce.
The euro was bid at $1.2945 from Thursday’s close of $1.2964.
“Gains in the rand were kept in check‚ however‚ after a very disappointing US earnings report overnight‚ which is negative for global growth. We also had bad data from the European Central bank which indicated that the private sector was contracting further‚ which led to euro weakness‚” Kalkwarf said.
Bonds remain softer at noon
The SA bond market remained a little softer at noon on Friday‚ with a muted reaction from the inflation-linked bond (ILB) auction.
At 12.15pm the benchmark R157 bond was trading at 5.480 percent from Thursday’s close of 5.465 percent and Wednesday’s close of 5.450 percent. The R207 was bid at 6.490 percent and offered at 6.480 percent from its previous close of 6.465 percent‚ and the R186 was trading at 7.770 percent from its previous close of 7.730 percent.
The rand was bid at R8.7516 to the dollar from Thursday’s close of R8.7755.
“Trading patterns remain fairly thin; we are rand driven for now‚” said a local trader.
The SA Reserve Bank on Friday allotted R2.685 billion of 3-month Treasury Bills at an average discount rate of 4.94 percent. The bank allotted R1.515 billion worth of 6-month Treasury Bills at an average discount rate of 4.94 percent and R1.100 billion worth of 9-month Treasury Bills at 4.91 percent. The Bank allotted R880 million worth of 12-month Treasury Bills at an average discount rate of 4.82 percent.