Rand firms against the euro

The South African rand was firm against a soft euro this morning and targeted 9.40 against the single currency, while staying in a range against the dollar.

At 09.01 the rand was bid at R7.41 to the dollar, R9.41 to the euro and R11.05 to the pound. The euro was bid at US$1.2677 from US$1.2631 previously.

A local trader said the euro/rand is targeting 9.40, with the local currency in a range against the dollar. "It is important to note that we are talking more about a weaker euro than a stronger rand, which is holding firm against the dollar," he said.

RMB noted in a morning report that markets could get some indication at Old Mutual's (OM) annual meeting today of the rumoured sale of its subsidiary Nedbank to Standard Chartered. Comments from banking analysts suggest that such a deal would make sense for both Nedbank and OM. "The only meaningful event today for the markets is the SARB MPC meeting. It's highly unlikely that we will see a rate change, especially after yesterday's amazing manufacturing production data (up 6.3% suggesting that first quarter of 2010 GDP growth could be slightly stronger than our preliminary estimate of 4.0% q/q).

"We don't expect this to move the rand. The key market to watch still remains euro/US dollar, although possibly more so for Euro/rand than US dollar/rand.”