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Currencies

17 November 2004 Angelo Coppola

The rand pushed through the key R6-a-dollar for the first time in nearly four months yesterday, with traders saying further strengthening was possible if the dollar remained sickly.

Dollar weakness across the board pushed the rand up 1,4% to R5,96/$, its strongest level since July 21.

The rand also received a lift from comments by President Thabo Mbeki that there had been no talks on intervening in foreign exchange markets and by the gold price's test of a fresh sixteen-and-a-quarter year high.

It is all just because of a weaker dollar. The rand has become a benefactor of the dollar's weakness.

The dollar dropped to an all-time low against the euro yesterday ahead of a G-20 finance ministers' meeting in Berlin as analysts fretted that officials would do little to stem the currency's fall.

A stream of quite upbeat US economic data was ignored because currency traders are more focused on long-term factors that are hurting the dollar, including the wide US current account deficit and global foreign exchange policy.

The euro soared to all-time peaks around $1,3047 against the US currency and mid-afternoon, the euro was trading at $1,3033 up 0,6% on the day. The dollar fell to a new seven-month low against the yen around ¥103,82, down 1,4% on the day.

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