Rand firm in early trade

The rand was firm in morning trade on Wednesday, having failed to break through R7.42/$ and amid uncertainty over global markets and talk of a double dip recession.

At 9.01am local time the rand was bid at R7.33 to the dollar, R9.28 to the euro and R11.29 to the pound. The euro was bid at $1.2656 from $1.2668 overnight.

A local dealer said: We tried to break through R7.42/$, failed, and this is the reaction back down, a firmer rand. The range is R7.32-R7.42 for now amid huge uncertainty among global markets. Money is still coming into emerging markets though, so for now the rand looks strong, although beware the adage when the US sneezes we all catch a cold."

RMB analysts said in a morning report that risks of a double-dip recession are growing.

"International data since mid-July has been very disappointing, especially in the US, and yesterday's housing data was probably the worst of the lot. Existing home sales dropped 27% in July alone to the lowest level in 15 years, fuelling concerns over fresh house price declines and yet another hit to consumer spending.”

"The rand, bizarrely, has outperformed, this despite the disappointing local GDP figure (up only 3.2% q/q from 4.6% in 1Q10) and the possible intensification of the public service strikes.”