Rand holds steady against the dollar

The rand was steady by midday on Tuesday, shrugging off a firm dollar against the major currencies.

At 11,39am the rand was bid at R7.63 to the dollar, R10.31 to the euro and R11.39 to the pound. The euro was bid at $1.3477 from $1.3560 previously.

"The rand is ignoring a stronger dollar," a local currency trader said, alluding to the relative growth of the local economy compared to a host of other leading countries as a possible reason.

"I am struggling to understand why the rand has not reacted to a stronger dollar which is caning the majors, but on a relative growth comparison, the South African economy is not bad," he said.

RMB analysts said in their morning report that purchasing managers indices in the core economies are stabilising at high levels consistent with continued rates of economic growth (4% in the US, lower in Europe).

The indices for emerging markets, by contrast, generally continued to improve, and none more so than South Africa where the Kagiso index jumped to its highest level in almost three years at 60.4.

US dollar/rand 7.60 as a result looks likely to hold for today, particularly given the lack of data or event risk," RMB said.

Dow Jones Newswires reports in the currency markets, the euro lost ground against the dollar on continued concerns over sovereign debt, while sterling was also under pressure amid political uncertainty ahead of the UK general election.