Rand remains strong

The South African rand remained on the front foot in early trade today, its strength underpinned by what dealers referred to as positive sentiment and a stronger euro.

One of the factors buoying the rand was the successful issue of a $2 billion sovereign bond by the South African government on Tuesday.

At 08.30am the rand was bid at R7.57 to the dollar from R7.59 at its previous close. It was bid at R10.32 to the euro and R11.35 to the pound. The euro was bid at $1.3633 from $1.3619 previously.

In their morning commentary, RMB analysts noted that though President Zuma "might be getting a grilling from the UK media during his state visit, offshore investors certainly seem to be in love with SA".

"The SA sovereign bond issue received excellent demand, with issuance of US$2bn at a surprisingly good rate, while JSE and BESA data show foreigners bought a high R9.4bn of local portfolio assets in February.”

Yet not all SA news is positive, they noted.

"Eskom has warned, again, that the country could face power shortages from next year.

Economic Development Minister Ebrahim Patel, is set to present his strategic plan today which is expected to contain strong protectionist measures. These though are longer-term concerns and for now the ZAR can certainly feel loved.”

Dow Jones Newswires meanwhile reported that the dollar touched a two-and-a-half-month low against the yen in Asia on Wednesday due to selling by Japanese exporters, falling long-term US interest rates, and expectations for weak US jobs data.

Elsewhere, easing concerns over Greece's debt problems helped the euro rise further versus the greenback, while doubts over the ability of Prudential PLC (PRU.LN) to buy part of a major US insurance company lifted the British pound against the US currency, dealers said.