Rand consolidates after gains

"The rand is the default hedge currency for other emerging market currencies that are not as liquid as the rand‚ which is why we gained on Tuesday after the Turkish rate hike. We will have to see whether we hold onto to those gains when London starts trading this morning‚" a local foreign exchange trader said.

This morning (24 July) the rand was bid at R9.7143 to the dollar from R9.8083 on Tuesday and R9.6742 at the Tuesday's close. The local currency was bid at R12.8236 to the euro from its previous close of R12.7873 and was at R14.9103 against sterling from R14.8643 at its previous close. The euro was bid at $1.3202 from $1.3222 at Tuesday's close.

RMB said in its morning report that the market has finally capitulated.

"The rand's break of 9.78 has seen a gap down to under 9.70. The downtrend is now entrenched and we'll hear increasing talk of 9.50. Any further gains‚ though‚ will probably have to wait.

"This early morning's weak Chinese purchasing managers' index (PMI) has put commodities and commodity and emerging market currencies under some pressure. There's also some international risks through the day that will create caution: Eurozone PMI figures are out on the morning and more US housing figures due this afternoon‚" the bank said.