Rand still trapped in a range

The rand was trapped in a tight range by midday on Wednesday. It was in what a trader described as a consolidatory period.

At 11.34am the rand was bid at R7.41 to the dollar, R10.03 to the euro and R11.02 to the pound. The euro was bid at $1.3587 from $1.3605 previously.

A local trader said: "The rand is in a tight range, similar to yesterday, at 7.37 to 7.47 against the dollar. I think we are seeing a period of consolidation, ahead of any further moves."
RMB analysts in their morning report noted that the managing director of the IMF, Dominique Strauss-Kahn, weighed in on the debate on artificially weakening the rand, saying that it would be a "very short-sighted" move for SA to make.

Strauss-Kahn stressed the importance of maintaining investor interest in South Africa, citing the weakening of the rand as a possible deterrent to capital market inflows, which is used to finance the country's expansive current account deficit, a concept that we continue to emphasis as a risk to our long-term US dollar/rand forecast, RMB said.

Dow Jones Newswires reported that in the European foreign exchanges, currencies traded in tight ranges Wednesday as investors looked for fresh cues.