Rand gains after dollar weakens on widening US trade deficit
THE rand was firmer late on Tuesday, capitalising on the weaker dollar, which fell after figures revealed the US trade deficit widened to its worst level since 2008.
The local unit advanced against all the major currencies on Tuesday, including the euro and the pound as the disappointing US trade figures paved the way for risk-taking ahead of key US employment figures later in the week.
At 3.30pm the rand was at R12.0007 against the greenback following a close of R12.0614 on Monday.
The local unit was at R13.3575 against the euro from a previous close of R13.4478 and traded at R18.1687 against the British pound‚ from its previous close of R18.2377.
The euro was at $11.1131 from a close of $1.1149 overnight.
A much larger than expected rise in imports in March caused the shortfall on America’s trade account to soar 43% to $51.5bn — its highest level in nearly six years, figures from the US Commerce Department showed.
The jump in March was also the largest monthly expansion in the trade gap since December 1996, according to Dow Jones Newswires.
Commenting on the rand’s response to the US trade figures, a Rand Merchant Bank trader said: "If we break below R11.96/$ to R11.98/$, things may start getting interesting for the rand.
"If not, expect the rand to continue trading in ranges."
© BDlive 2015