Currencies (28.5)

The rand was steady against the dollar in late afternoon trade yesterday despite a stronger euro, with importer demand keeping the local unit at bay.

RMB AM reports that market analysts nevertheless expected the rand to strengthen further, possibly targeting the R6,40 level.

In late afternoon, the rand was quoted at R6,5826 to the dollar from an overnight close of R6,5951 on Wednesday , R6,6043 on Tuesday and R6,660 on Monday. It was quoted at R8,0453 to the euro from a previous R8,0145 and at R12,0670 to the euro from Wednesday's R11,9650.

One analyst said that they have seen some hectic importer demand at about R6,55 yesterday and today this level has proved too tough to break, but they thought it was only a matter of time.

Should the rand manage to sustain a break through R6,55, stop losses would likely be triggered below R6,49, which would take it to R6,40. Should R6,55 hold, the rand would likely trade in a R6,53-R6,62 range for the rest of the day.

The analyst added that a number of factors were contributing to the dollar's weakness. US data was not fantastic.

Even though GDP was revised higher, it was still softer than expectations. Geopolitical concerns were also plaguing the greenback.

The dollar tumbled yesterday afternoon after data showed stronger but below-forecast US economic growth in the first quarter, sparking a sell-off that ruptured technical support levels.