Rand loses ground in weeks’ trade as Lonmin saga persists
The rand held relatively steady against major currencies in late trade. Market trends showed the rand remains weak with the crises at Marikina Mine still in the headlines everywhere. A management and union solution to the problems will be good for the rand – but as at the moment we are still under pressure. The market did show signs of being caught a bit too long of dollars yesterday if we look at flow-trade pricing, with aggressive offers still losing out. The range of 8.2700/8.3700 is still in play with the major drivers the euro. Investors are worried that the Lonmin violence spills over to other mines‚ which could affect the entire mining environment in SA. This would obviously be bad for mining production and therefore exports. The market is waiting in anticipation for the next Lonmin move before we will see any strength. Exporters are being seen in at these levels
[box]Market trends showed the rand remains weak with the crises at Marikina Mine still in the headlines everywhere.[/box]
Euro trading subdued
Trading was subdued as the euro changed slightly during Asian trade on Tuesday, remaining in a very tight range of $ 1.2347-1.2356 for almost the whole session. The Australian dollar headed higher against the dollar, hitting $1.0482 as some stops were taken out, as the move had nothing to do with RBA’s dovish monetary policy minutes.
My Gut Feel
My gut feel is as per my report, I still think the ZAR is under more pressure, although seems it has a top at 8.35. I expect the market to be long of dollars and some profit taking together with exporters will see the ZAR eventually track back, but in meantime nervousness is the key factor here. The Euro is also still a factor as the sovereign debt issue is still a huge reality.
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