Currency Capers

pms laflame at aaahawk.com
Tue Jun 18 10:13:42 PDT 2002


I still have to re-re-re-read what Doug and Charles said about currency cause I just don't seem to get it. Anyway, in this story, when they say USDs were sold in London and the ZAR went up, does that imply that Zar was bought with those USDs. All last week, even when the USD went down against the EUR, the ZAR weakened anyway. So it doesn't always go up when the dollar goes down(but it did last month). Can someone explain what this situation implies generally?:::

DJ. S Africa Rand Up On Offshore Dlr Selling; Bond Yields Dn

JOHANNESBURG (Dow Jones)--The South African rand was sharply higher against the U.S. currency late Tuesday on dollar exports and offshore dollar selling, dealers said.

Around 1505 GMT, the rand was trading at ZAR10.2500 against the dollar, from ZAR10.4730 late Friday, while on the debt market the R150 government bond yield had fallen to 11.630% from 11.660%. The longer-dated R153 bond was yielding 11.770%, down from 11.800% Friday.

The rand gained more than 30 cents in local trading Tuesday after it fell to ZAR10.6900 in offshore trading Monday.

South African financial markets were closed Monday for a public holiday.

Dealers said the rand rose on large dollar sell orders out of London, which prompted local market participants to cover their short rand positions.

They added that the local currency ignored the release of inflation data which showed annual CPIX inflation rose to 9.2% in May from 8.8% in April.

CPIX, which excludes mortgage interest payments, is at its highest level since its introduction in 1998, surging from 5.8% in September on the back of a weak rand.

May's CPIX number was exactly in line with economists' expectations.

Dealers said they expect to see the rand trade between ZAR10.1500 and ZAR10.5500 over the next few sessions, with a move back through ZAR10.5500 likely to see the local currency target its next key support at ZAR10.800.

On the debt market, yields ended lower Tuesday on the rand's recovery against the dollar and the release of the CPIX data.

While the R150 government fell to a low at 11.625%, the longer dated R153 ended the session around its low at 11.770%.

12.0% RSA 150 OF 2005: 11.630% VS 11.660%

13.0% RSA 153 OF 2010: 11.770% VS 11.800%

-By Adam Aljewicz, Dow Jones Newswires; +27 11 783 7848; adam.aljewicz at dowjones.com

(END) Dow Jones Newswires 18-06-02

1521GMT

DJ info: 1059,1857,4042 N/DJCS,N/DJWI,N/BON,N/DJOS,N/EXC,N/FRX,N/FXC,N/ICM,N/MKC,N/MKT

FSN874 FC COMMENTS CURRENCY 2002-06-18 15:21:40 UTC ^^^^^



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