Currencies (24.6.04)

The rand gained more ground against major currencies yesterday afternoon after offshore dollar sales saw stop losses triggered at the R6,27-to-the-dollar level.

Currency traders saw scope for the rand to strengthen further, possibly targeting its 12-month best level of R6,09 to the dollar in coming days.

In late afternoon, the rand was quoted at R6,2376 to the dollar from an overnight close of R6,3050 on Tuesday, R6,3186 on Monday R6,3908 on Friday and R6,5213 on Thursday.

It was quoted at R7,5247 to the euro from a previous R7,6294 and at R11,3510 against sterling from Tuesday's R11,4920.

One currency trader said there was a technical break below R6,27 this morning which saw stop losses triggered. Offshore banks were the main sellers today, while locally we mostly saw buyers on the importer side.

He also said that the supply had exceeded the demand, which was why stops had been triggered. The traders said that the rand had weakened after its initial run in the morning because the extent of dollar selling out of London had seen the market caught short on dollars.

Players who were long rands therefore took profits. The second move firmer came when they entered their positions again.

The dollar advanced against European currencies yesterday, but weakened against the yen as investors pondered a US rate rise expected next week and new data showing a recovery in Japan's economy.