* Traders snap up the dips in the falling currency
* Rand to remain under pressure on euro zone debt issues
JOHANNESBURG, April 11 (Reuters) – South Africa’s rand
recouped some of its losses against the dollar on Wednesday but
could remain under pressure as a negative risk sentiment
persists on the back of global economic worries.
The rand was up 0.14 percent against the U.S dollar
at 0614 GMT, trading at 7.992 against the dollar from Tuesday’s
New York close of 7.9805.
“The initial blow-out that we saw may have been slightly
overdone, the rand is finding good resistance at 8 per dollar,
we can expect to see some form of resistance around those
levels,” said Brigid Taylor, Nedbank head of Institutional
Sales.
“But still looking for 8.25 on the dollar/rand, purely
because there are issues in Europe that need to be resolved
around the adequacy of mechanisms as well as the Spanish economy
coming under pressure.”
Risk sentiment has been hammered by a number of factors in
the past few days, namely poor U.S. jobs growth, a jump in
Spanish bond yields on concerns about the fragility of
peripheral euro zone economies and disappointing China imports.
Locally, manufacturing figures due to be released later in
the day will shed some light on the economic growth momentum for
Africa’s biggest economy. Economists surveyed by Reuters expect
a modest pick-up of 2 percent in February compared to 2.4
percent in January.
The repo rate in South Africa has been at kept at a
historical low of 5.5 percent since November 2010 after the
Reserve Bank cut it by 650 basis to counter a 2009 recession.
Continued…
