Rand firms against US dollar

The rand was firmer against the dollar in early morning trade on Wednesday. It was tracking a euro that had hit its highest level since December 2011 against the greenback on renewed hopes around Greece's debt talks.

“The risk-on scenario seems to be moving into the picture again,” a local currency trader said.

“The dollar rand test would be 7.48 to the downside and I put the ranges initially at 7.52 to 7.59,” he added.

The trader, however, said the rally in the euro could possibly be some short covering as no long-term positions had been taken.

“I think we need a little more certainty, a little more news out of the Eurozone,” he added.

At 08:34 local time, the rand was bid at R7.5297 to the dollar from its previous close of R7.5579. It was bid at R10.0035 to the euro from R10.0159 before, and at R11.9794 against sterling from R12.0110 previously.

The euro was bid at US$1.3282 from its previous close of US$1.3248.

RMB said in a note that Greek politicians had missed yet another deadline to agree on new austerity measures.

“According to an official this is because of missing paperwork, the same excuse given for not meeting Monday's deadline. The dog ate my homework, ma'am.”

RMB added what was really going on seemed to be that the decision makers did not want to take the political hit from supporting yet new pain for Greek voters “and, in contrast to the rest of us, see no need for urgency.”

At least there was optimism that they were edging “towards picking up a pen and signing the paper”.

“We might have to wait right until the 15 February deadline of deadlines for this to actually happen but for now the market's mood has switched to moderate optimism, this is against a cautious tone earlier in the week,” RMB noted.

The bias on the rand would then switch back towards moving stronger.

“Whether it can break into new territory is open to question; our compatriot currencies seem becalmed - trading in the same ranges as the past two days in early Asian trade.

“If there is going to be a break lower, USD/ZAR rather than EUR/ZAR is where it will happen.”

Meanwhile, Dow Jones Newswires reported that the euro rose to its highest since early December on fresh hopes that Greece's debt restructuring would be completed soon.

“The key focus is on if Greece can go through with its bond redemption due on March 20,” Bank of Tokyo-Mitsubishi UFJ's Hirai said.

The Greek debt restructuring deal with private creditors needed to be done by sometime next week to clear the administrative procedures necessary to ensure Greece met this redemption deadline, Hirai said.

“The pair is therefore likely to be choppy over the next week, moving within a $1.29 to $1.34 range,” he added.

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