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Category Retirement
SUB CATEGORIES Annuties |  General |  Savings & Investments | 

Currencies

07 May 2004 Angelo Coppola

RMB Asset Management reports that the rand lurched weaker on Friday, knocked by the dollar's surge after a strong US employment report, but dealers said the key level of R7,03 against the dollar was likely to hold unless the greenback rose further.

The rand was trading at R7 to the dollar, about 13c weaker than its late level on Thursday, after firming to R6,82 early in the session on an inflow of foreign exchange from exporters.

It has all been on the back of the US figures today and dollar moves. One trader said that they are seeing some resistance ahead of the R7,03 against the dollar area, which should hold - but if the euro does slip again you might see people testing it again in thin market when New York is still open.

The rand often closely tracks the euro as this is the unit of SA's main trade partner.

News than non-farm payrolls rose by 288 000 last month – above expectations of a 173 000 increase and compared with an upwardly revised 337 000 in March - convinced markets that the timings of a US interest rate hike was drawing closer.

The rand has been supported in the past year by surging prices for some of the country's main commodity exports - gold and platinum - long with a favourable interest rate differential to many of its trading partners.

So far this year the rand has depreciated about 4% against the dollar, against gains of 28% last year and about 40% in 2002.

The dollar surged on Friday after news that a surprisingly high number of jobs to US payrolls in April, strengthening the case for the Federal Reserve to raise interest rates sooner than expected.

Quick Polls

QUESTION

There are countless articles written about South Africa’s poor retirement outcomes. Which of the following would you single out as the biggest contributor to local savers not accumulating enough to buy an adequate and sustainable pension?

ANSWER

Lack of personal accountability
Poor participation in formal retirement funds
Reluctance to seek financial advice early on
SA’s high unemployment rate
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