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Weaker?

22 September 2004 Angelo Coppola

The rand was weaker against major currencies in late afternoon trade yesterday on the back of importer demand for dollars, a softer euro and a lower gold price.

RMB AM and Business Day report however, market analysts expected the local unit to remain range bound going into the long weekend, as tomorrow is a public holiday.

In late afternoon, the rand was quoted at R6,524 to the dollar from R6,448 on Tuesday. It was quoted at R7,98 to the euro from a previous R7,948 and at R11,689 against sterling from Tuesday's R11,598.

There were some oil imports initially, which was the main reason behind the rand's weakness. This got (dollar) bids into the market.

As the euro-dollar started to retrace and the gold started to pull lower, there was commodity currency weakness. This started to filter through to the rand and the short dollar positions got a bit squeezed.

The dollar gained broadly yesterday, reversing losses sustained the day before as markets reassesses comments from the Federal Reserve and concluded that US interest rate increases were still under way.

The central bank said inflationary pressures had eased, giving some players reason to think initially the Fed may become reluctant to make further dollar-boosting rate rises.

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