JOHANNESBURG — THE rand was softer against the dollar late on Wednesday due to local oil companies buying dollars to pay for their oil imports.
Oil prices have rallied 19% in the past four days on reports of a slowdown in United States drilling activity, spending cuts by major oil companies and a strike at some US refineries.
But crude is still down about 50% from its peak in June and analysts caution that the market remains oversupplied.
Brent, the global benchmark, declined $1,53, or 2,6%, to $56,38 a barrel on ICE Futures Europe, Dow Jones Newswires reported.
At 4:35pm, the rand was at R11,4219 from Tuesday’s close of R11,3723.
Against the euro, the local unit was at R13,0510 from a previous close of R13,0236 and was at R17,3740 against the British pound from a previous close of R17,2106.
The euro was at $1,1426 against the dollar from a close of $1,1455 on Tuesday.
“The rand was at R11,38 to the dollar this morning and has weakened to R11,45 due to a lot of local oil importers buying US dollars to pay for their oil imports,” TreasuryOne chief dealer Wichard Cilliers said.
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Less money flowed into our bond market today which also did not help the rand, after we have seen “massive inflows” into our bond market recently, he said.
Meanwhile, the Automatic Data Processing jobs report in the US that came in weaker than expected, did not have much of an influence on the rand, Cilliers said.
Fewer-than-expected new private-sector jobs were created in January at 213 000 new jobs from a widely expected 240 000 jobs.
The miss might temper expectations for today’s US payrolls report. For now economists expect nonfarm payrolls to have increased by 237 000.
Private-sector employment data in the US is compiled by payroll processor ADP and forecasting firm Moody’s Analytics. —BDLive
