The rand was trading sideways and indecisively on Monday afternoon after “capitulating” on Friday in reaction to strong US economic data and weak Chinese numbers.
The rand weakened to a close of R10.7585 against the dollar on Friday after earlier trading at R10.59, but on Monday morning it was slightly stronger at R10.70, but struggled to break through that level.
At 3.51pm, the local unit was at R10.7396 to the dollar from Friday’s close of R10.7585.
Against the euro, the rand was at R14.9089 from its previous close of R14.9265 and was at R17.8616 to the pound from R17.9878 on Friday.
The euro was at $1.3885 from $1.3877 at its Friday close.
A trader said the rand was awaiting new developments on the data front, with the major one on Wednesday when the Reserve Bank released the current account number for the fourth quarter of 2013. Some economists predict a strong rebound to around 5.5% of GDP from 6.8% in the third quarter, which will be rand supportive. A worse number could send the currency weaker.
The trader said the rand was now on the back foot. “This is not that surprising as the currency was due for some consolidation at best.”
The rand has had a strong run since reaching a low of R10.38 in January. This was after technical indications showed the rand was heavily oversold.
“The rand tends to overshoot in either direction so that further strength cannot be ruled out, although resistance will prove hard to break,” said the dealer.