admin“The dollar is being bought again and currencies like the euro are getting sold off against the greenback,” a local currency trader said.
At 11:35 local time, the rand was bid at R8.1961 to the dollar from its previous close of R8.1312. It was bid at R10.5474 to the euro from R10.5089 before, and at R12.7529 against sterling from R12.6830 previously.
The euro was bid at $1.2870 from its previous close of $1.2930.
South African bonds lost some ground as they tracked the local currency amid thin trading conditions.
Dow Jones Newswires reported that selling pressure on the euro had resumed amid the renewed eurozone debt concerns.
Besides the worries over Spain, debt-strapped Greece’s warning that it faced the prospect of a disorderly default if negotiations on its second bailout weren’t completed by March also weighed on the single currency.
“There will be potential for violent short-covering rallies, but don’t expect them to be sustained,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.
He added that because investors were bracing for the prospect of recession and one or more credit downgrades in the eurozone, “I’m looking for the euro to trend lower”.
Most analysts were of the opinion that the common currency’s negatives were crowding out any positive news.
South African bonds were weaker in midday trade.
By 11:50, the benchmark R157 bond was trading at 6.925 percent, from its previous close of 6.840 percent. The R207 was bid at 8.100 percent and offered at 8.105 percent from a previous close of 8.025 percent and the R186 was bid at 8.700 percent and offered at 8.705 percent from its close of 8.615 percent.
“We’ve drifted higher on the rand. Flow is very, very thin though so moves are somewhat exaggerated,” a trader said.
With no local data due today, markets will focus on the global counterparts for news flow and direction.
Foreigners were net buyers of R539.017m of South African bonds including repo transactions on Wednesday after net sales of R536.382m of local bonds on Tuesday, data released by the JSE show.
Nominal cumulative volume was R41.107bn on Wednesday from R72.089bn on Tuesday.
Foreigners were net buyers of R541.385m of South African bonds excluding repo transactions on Wednesday after net sales of R536.388m of local bonds on Tuesday.
For the year to date foreigners have been net buyers of R5 million of local bonds, excluding repo transactions.
In 2011 foreigners were net buyers of R47.359 billion worth of local bonds, excluding repo transactions.
In the year to date foreigners have been net sellers of R2,6m of local bonds including repo transactions.
In 2011 they bought R37.501bn of local bonds. — fin24.
Online Reporter