* Rand turns firmer as risky assets gain in late trade
* But still likely to try for 8.50 support again
JOHANNESBURG, Sept 5 (Reuters) – The rand firmed against the
dollar in a volatile session on Wednesday, recovering from
weaker levels near a key support region as the euro rallied in
late afternoon trade.
The rand came back from the session low of 8.4672/dollar as
the euro — the currency of South Africa’s country’s key trading
partner — rallied above $1.26 on talk that the European Central
Bank (ECB) may unveil an unlimited bond-purchasing programme on
Thursday.
By 1606 GMT the rand was up 0.2 percent at 8.3978
on it previous close of 8.4127 in New York, but was looking
vulnerable ahead of the ECB meeting.
“We expect to see some rand weakness, possibly dollar/rand
position squaring ahead of tomorrow’s ECB meeting, given the
risk that markets could end up disappointed if Draghi fails to
meet expectations after recent comments regarding bond
purchases,” said Anisha Arora, emerging market analyst at 4Cast.
The rand has weakened towards 8.50 in the past few sessions
but has failed to break through that key support level and
instead bounced to 8.33 this week. Analysts say the unit is
likely to ignore domestic data this week, and instead take its
cue from the external environment.
Locally business confidence, central bank reserves and the
Reuters Econometer are due.
“Should euro/dollar break below the 1.250 area, we suspect
8.50 will become an attractive level for dollar/rand, but until
we see some trigger, be it from the markets reaction to the ECB,
recent 8.36-8.50 ranges are seen intact,” Arora added.
Continued…
