Johannesburg - The rand was weaker in early Friday trade, moving above R7.90 to the dollar as the greenback continued its rally and the gold price retreated sharply.
By 9.00am the rand was bid at R7.9180 to the dollar from a previous close of R7.8357. It was bid at R11.6959 to the euro from a previous R11.5927 and at R14.7280 against the pound from R14.6337 before.
The euro was bid at $1.4746 from $1.4801 overnight, while gold was quoted at $790.65 per ounce from $805.15 overnight.
RMB analysts said in their morning report that the outcome of Thursday's MPC meeting had largely been anticipated and therefore there was little reaction from the rand. However, it has weakened since as the US dollar strengthened to a new six-month high of 1.47 against the euro overnight and the gold price plunged.
"With the dollar having strengthened to a new six-month high of 1.47 against the euro overnight and gold having tumbled from a high of $836 yesterday to $789 this morning, there is little positive news for the rand. The risks therefore are firmly to the upside and while the dollar versus rand is likely to face some resistance at 7.93, it could test the 8.00 level in today's trade," they said.
Dow Jones Newswires reported the euro is lower against the dollar amid expectations of further losses. The slumping European Monetary Union's economy may require a deep correction in the euro to $1.07, from around $1.4775 now, said AIG.
The dollar rose against the euro on Thursday to levels unseen since February as crude oil prices resumed their downward trend and US stocks moved higher. As the dollar soared, several big banks including Goldman Sachs scrambled to rejig their dollar forecasts to reflect what many say is a sea change for the US currency.
"We have changed our view and think the dollar has bottomed," Goldman Sachs said in a research report. "Until the end of the year the road may remain bumpy... but the underlying picture has turned much more dollar-positive."
Goldman said it now sees the euro at $1.45 in three months, $1.50 in six months and $1.40 a year from now.