Short and narrow

The rand was stuck in a narrow range against the dollar in late afternoon trade yesterday in a flow-driven market.

(12.8.04) Currency traders saw the local unit looking to the euro - which it tends to track because the euro zone is SA's largest trading partner - for direction.

In late afternoon, the rand was quoted at R6,1963 to the dollar from R6,1726. It was quoted at R7,5565 to the euro from a previous R7,5295 and at R11,3170 against sterling from Tuesday's R11,2710.

There have been quite a lot of local exporters selling dollars above R6,20 and offshore buying just below R6,20, so the rand has been in quite a tight range.

The rand was expected to remain range bound between R6,10 and R6,28 for now.

The dollar firmed modestly against the euro yesterday as the market digested the previous day's US interest rate hike and waited to see if upcoming economic data bear out the Fed's optimism.

The Federal Reserve raised its benchmark rate by a quarter percentage point on Tuesday - its second rate hike in six weeks - to 1,5% broadly boosting the US currency.