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Rand weakens in quiet trade
December 20, 2004
Johannesburg - The rand weakened slightly in quiet trade on Friday, undermined by offshore selling, with traders looking to the dollar and euro for guidance.
"We've basically been moving on the euro, and a bit of offshore selling from a German bank," said one trader.
The dollar rose against a basket of currencies, including the euro (the currency of South Africa's main trade partners), after a US survey showed consumer prices in line with expectations.
At 5pm the rand was trading at R5.75 to the dollar from R5.72 on Wednesday, before the Reconciliation Day holiday.
Traders said the currency was trading in a range of between R5.75 and R5.85, with further support seen as R5.92.
With many dealers heading off for the Christmas break, liquidity was expected to be low this week, with markets likely to shrug off inflation data. But there could still be big moves.
A poll of analysts showed them expecting headline CPIX, the central bank's targeted inflation rate, at 4.4 percent year on year, a slight increase from the previous month's 4.2 percent.
"I don't think it will make much difference, even for bonds, because it won't change anyone's mind," said another trader.
Bonds were little changed from Wednesday's close. The yield on the benchmark R153 weakened to 7.99 percent from 7.97 percent while the R194 was unchanged at 7.73 percent.
December 20, 2004
Johannesburg - The rand weakened slightly in quiet trade on Friday, undermined by offshore selling, with traders looking to the dollar and euro for guidance.
"We've basically been moving on the euro, and a bit of offshore selling from a German bank," said one trader.
The dollar rose against a basket of currencies, including the euro (the currency of South Africa's main trade partners), after a US survey showed consumer prices in line with expectations.
At 5pm the rand was trading at R5.75 to the dollar from R5.72 on Wednesday, before the Reconciliation Day holiday.
Traders said the currency was trading in a range of between R5.75 and R5.85, with further support seen as R5.92.
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With many dealers heading off for the Christmas break, liquidity was expected to be low this week, with markets likely to shrug off inflation data. But there could still be big moves.
A poll of analysts showed them expecting headline CPIX, the central bank's targeted inflation rate, at 4.4 percent year on year, a slight increase from the previous month's 4.2 percent.
"I don't think it will make much difference, even for bonds, because it won't change anyone's mind," said another trader.
Bonds were little changed from Wednesday's close. The yield on the benchmark R153 weakened to 7.99 percent from 7.97 percent while the R194 was unchanged at 7.73 percent.
