Rand edges lower despite upbeat producer inflation figures

THE rand weakened further against the dollar at midday on Thursday‚ as headlines about whether Greece would be able to meet its upcoming loan obligation remained in the spotlight.

At 11.59am‚ the rand was at R12.0768 against the dollar from Wednesday’s close of R12.0260.

The rand was also softer against the euro‚ trading at R13.2072 from a previous R13.1124 and slipped to R18.4856 against the British pound from a previous close of R18.4658.

The euro advanced to $1.0935 against the greenback from a previous close of $1.0904.

Even better than expected producer inflation figures failed to inspire any real support for the local currency as investors remained glued to the latest developments in Greece.

On Thursday‚ international newswires quoted a Greek government spokesman as saying that the country aimed to have an agreement by Sunday.

This follows comments on Wednesday from European officials‚ who played down the chances of an imminent deal‚ saying there was still some way to go before the impasse over the future of Greece's finance is resolved‚ Dow Jones newswires reported.

Greece is due to make a loan repayment to the International Monetary Fund on June 5 or risk default and a possible exit from the Eurozone.

Meanwhile‚ figures from Statistics SA on Thursday revealed producer inflation for final manufactured goods decelerated slightly to 3% year on year in April from 3.1% in March.

A median consensus forecast from a BDpro survey of eight economists had forecast producer inflation to have accelerated to 3.4% year on year in April.

The latest data could suggest that the effects of a weak rand have not yet been fully felt in domestic prices.

– Business Day, RDM News Wire