GDP has little effect on rand

The South African rand remained on the back foot in midday trade amid a rise in risk aversion as global tensions over North Korea heightened and jitters over Europe's sovereign debt crisis continued.

At 12.10pm the rand was bid at R7.98 to the dollar, R9.70 to the euro and R11.38 to the pound. The euro was bid at $1.2194 from $1.2348 previously.

"The rand remains under pressure on equity market weakness and dollar strength throughout.  It's all on the back of the North Korean issue and, of course, the European debt crisis," a local currency trader said. He said the rand had been unmoved by local GDP data which was better than expected.

South Africa's real gross domestic product (GDP) at market prices on a quarter-on-quarter (q/q) seasonally adjusted annualised (saa) basis rose by 4.6% in the first quarter of 2010 from 3.2% in the fourth quarter of 2009, Statistics South Africa (Stats SA) data showed on Tuesday.

GDP growth was expected at 4.3% q/q, according to a poll of leading economists by I-Net Bridge. The range of forecasts among nine economists, was from 3.3% q/q to 5.6%.

Meanwhile, US existing home sales surpassed market expectation and surged to 7.6% m/m in April.