Money SA economy
A firm rand gained further momentum by midday,testing a key technical level of 7.27 versus the dollar, having broken through the psychological barrier of 7.30 against the greenback.
A local dealer noted that the euro was also putting pressure on the dollar, fuelling rand strength.
At 11.50am local time the rand was bid at R7.27 to the dollar, R9.53 to the euro and R11.39 to the pound. The euro was bid at $1.3078 from $1.2993 overnight.
"Current trade indicates that the rand wants to get stronger. The 7.30 figure against the dollar is a big level, but it's more of a psychological barrier, while 7.27 is a key technical level. If we break through there we could see further rand strength. The euro is also putting pressure on the dollar."
The dealer said that local producer price index (PPI) data indicated a slim chance of a further rate cut.
South Africa's PPI registered growth of 9.4% year-on-year (y/y) in June compared with 6.8% y/y in May, Statistics South Africa (Stats SA) data on Thursday showed.
The PPI increased 4.0% on a monthly basis after May's monthly increase of 0.2%.
The PPI was expected to have reached 7.5% y/y, a survey by I-Net Bridge found. Forecasts among the 10 leading economists surveyed ranged from 6.5% y/y to 8.6% y/y.
Dow Jones Newswires reported that renewed fears of a double-dip recession in the US pushed the dollar lower and finally helped the euro to establish itself above $1.30 on Thursday.
