| South Africa’s rand continued to rally in late afternoon trade yesterday, after the euro broke back above 1.50 against the dollar. Gold is once again trading at an all time high this morning which is a further positive for the local unit. Inflation data released yesterday showed that CPI fell back into the MPC targets at 5.9 percent, however economists expect inflation to rise again. We have seen solid importer demand at current levels and we are back at levels where S.A. Reserve Bank is not comfortable with the rand’s strength, but with the higher commodity prices there could be scope for further strength.
The dollar was under pressure on all fronts on Thursday, after breaking down to 15-month lows the previous day, and looked in peril of marking a 14-year low against the yen as Japan signaled it was watching but unlikely to step in. Dealers said short-term players continued to sell the dollar against the Japanese currency, after it fell to a 10-month low of 87.21 yen JPY= on Wednesday, although Japanese companies were buying dollars at the lower levels, helping keep it off the low. The catalyst for Wednesday’s breakdown, which took the greenback to a 15-month low against the euro and a basket of currencies, was an indication from the Federal Reserve that the dollar’s fall has been orderly and interest rates will stay low for some time. Market players said it was likely to remain under pressure in potentially volatile trading on Thursday, when U.S. markets are closed for Thanksgiving. But talk of an options barrier at 87.00 yen, as well as expected buy orders ahead of last January’s 13-year low of 87.10 yen, could lend it some support. |
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| Current levels | |||
| Rand / Usd | 7.3300-7.3800 | ||
| Rand / Euro | 11.1000-11.1500 | ||
| Rand / Sterling | 12.2500-12.3000 | ||
| Jpy / Rand | 11.75-11.80 | ||
| Jpy / Usd | 86.70 | ||
| Usd / Euro | 1.5105 | ||
| Gbp / Usd | 1.6688 | ||
| Gold | $1 193.00 | ||
| Expected ranges | |||
| Rand / Usd | 7.3000-7.5000 | ||
| Rand / Euro | 11.0500-11.2500 | ||
| Rand / Sterling | 12.1500-12.3500 | ||
| Jpy / Rand | 11.70-11.90
article courtesy of Accredinet Financial Solutions |
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