Rand recovers as yen, Swiss franc weaken

of recovery as the market calmed, boosting demand for South Africa’s assets.
Last week saw the Federal Reserve Bank vowing to keep interest rates low until 2013 and increase differentials by so doing giving support for the dollar.
The currency of Africa’s biggest economy was trading at 7,1980 per dollar in Johannesburg from 7,2122.
It weakened to 10,2483 per euro. Given the volatility and swings on the market, investors need to manage any rallies whether equities or currencies between now and December and the only guide are trends, let market trends be your friend in this volatile market.
This will guide them exit money-losing trades and search for value in their bets.
There is also need to price political risk, which so far has been the driver behind all these market swings and volatility.
Given the risk appetite, high-yielding assets like the rand have regained favour from investors; the bias is in favour of the rand on the African soil, we are also seeing a lot of selling on the dollar, investors buying high-yielding assets.
In the long-term the market will buy a pleasure currency which is the dollar, easy to liquidate and considered as a broad trade basis currency despite all the uncertainties surrounding the US economy.
In Europe the euro reversed gains against the yen and the dollar on ECB bond buying, bringing back confidence in the Euro zone.
The euro rose to 110,08 against the yen from 109,76. The euro strengthened to US$1,4405 from US$1,4315 against the dollar.
The dollar traded at 77,21 yen from 76,71 yen. Markets are reluctant to aggressively sell the euro, as investors applauded ECB bond buying plan and the ban on short selling and traders putting trust on the ECB’s actions.
In London the pound retreated against the euro in as many days .The pound depreciated by near half a percent to 86,69 to the euro from 87,20.
Given the weak data in the UK at the moment the pound has been under pressure and looks like the market is considering selling the pound and long the euro.
The pound climbed against the dollar to trade at US$1,6437 in London from US$1,6350.
It gained to trade at 1,2570 francs and has dropped 12 percent this year against the Swiss currency.
The so-called classical currency the Swiss franc reversed earlier gains as the Swiss National Bank looks set to stem gains to stop the rally to support exporters against the dollar.
It was trading at 78,81 in London trade from 78,51. The Australian dollar rose from a week long slumber against the dollar on global stocks rally as Asian stocks rallied as markets calmed down increasing demand for the nation’s assets.
The Yen weakened on concern that the Prime minister of Japan will intervene to curb market gains in their currency.
The market is going to be very reluctant to be buying the yen and the Swiss franc when central bank intervention is at risk and when equity markets are buoyant.
The Japanese currency declined to 110,08 per euro from 109,30. Yen was trading at 77,21 per dollar from 76,71 per dollar.
The New Zealand and Australian dollars advanced against the yen amid speculation the Federal Reserve will consider additional steps to bolster the US economy, supporting demand for riskier assets.
Australia’s dollar fell to at A$1,0394 in Sydney from A$1,0406 in New York when it climbed to A$1,0394.
The currency advanced to 79,76 yen. New Zealand’s dollar depreciated to US81,81 cents from 81,82, and gained to trade at 62,78 yen from 62,68.
The New Zealand dollar strength came amid demand for high-yielding assets. The Aussie dollar looked attractive against the New Zealand dollar given the trading relationship with China and their growth outlook.
On the commodity’s front, gold rallied to a record US$1 889 an ounce as investors see the bullion as a measure of insurance.
Seasonal trends tend to be positive for gold and this current rally offers investors that store of value in times of market uncertainties in gold once technicals hint at stabilisation, crude oil reversed gains to open trade at US$81 per barrel from US$87,01 per barrel.
The global stocks reversed earlier gains and that had an effect on some of the energy stocks dragging down the price of crude oil.