Currencies (9.7.04)

Currency traders were divided over whether the local unit would test the psychological barrier of R6 to the dollar later in the day. It did.

In late afternoon trade the rand was quoted at R6,0351 to the dollar from R6,10 on Wednesday and then strengthened further to close at R5,99. It was quoted at R7,4637 to the euro from a previous R7,5639 and at R11,1970 against sterling from R11,3640.

A london based- trader said that despite the rand touching a long-term best level, it has been an uneventful day on the forex market. He said dollar selling, judging from the institutions involved, appeared to be equity related, and had come in from New York.

The dollar fell to three-month lows against the euro yesterday after a report showing a sharper-than-expected fall in US weekly jobless claims failed to alter the market's bearish sentiment on the US currency.

Analysts said the strong headline jobless claims number was due to seasonal factors and therefore was insignificant.

The dollar had been hampered by the Federal Reserve's insistence on a measured pace of interest rate rises, the disappointing June payrolls data and a report on Tuesday showing a slower pace of expansions in the US Service sector.