Profit taking
(27.8.04) The rand was firmer against major currencies in late-afternoon trade yesterday due to profit-taking by offshore players.
Commentators said the local unit's strength was surprising, given the softer-than-expected producer inflation numbers released earlier in the day.
In late afternoon, the rand was quoted at R8,6050 to the dollar from R6,6798 on Wednesday. It was quoted at R8,0497 to the euro from a previous R8,0567 and at R11,8640 against sterling from Wednesday's R11,9790.
A currency traders said that the rand was stronger due to profit taking by foreign players after the local unit's depreciation in recent days.
He said that the rand could firm to R6,50 in the next few days, but a sustained break below R6,57 was needed first.
The strength in the rand came in the wake of the PPI (producer price inflation) data, which is very surprising, said a market analyst.
The dollar drifted lower yesterday as dealers stayed on the sidelines before today's US second-quarter gross domestic product numbers and Federal Reserve Chairman Alan Greenspan's speech.
Traders will be looking to see if Greenspan still believes that the US economy's" soft patch" is temporary and that strong underlying fundamentals will sustain and strengthen the recovery in the months ahead.
