Weaker, and weaker…

(28.7.04) The rand was weaker against major currencies in late afternoon trade yesterday on the back of offshore demand for dollars. Currency traders saw the local unit weakening further later in the day.

RMB AM and Business Day reprot that at4pm yesterday, the rand was quoted at R6,2798 to the dollar from R6,24 on Monday. It was quoted at R7,5658 tot he euro from a previous R7,5630 and at R11,5330 against sterling from Monday's R11,4910.

A currency trader said that they have seen offshore dollar buying forcing the rand through the R6,27 level, which paves the way for R6,32 to R6,36, a currency trader said. He described the buying as a 'speculative punt' by offshore funds.

The traders expected the rand to trade in a R6,26-R6,36 range for the rest of the day.

The dollar vaulted to multi-week highs yesterday after strong US data added fuel to a rally sparked by last week's upbeat comments on the economy from Federal Reserve Chairman Alan Greenspan.

A better-than-expected consumer confidence report for July further boosted the dollar, already well bid after Greenspan signalled quicker tightening of monetary policy posed less of a risk to US economic recovery than leaving official interest rates too low for too long.