The rand was weaker in early trade on Friday as a host of factors weighed on emerging market currencies. The factors included a weaker close on the Dow and a firmer US dollar.

At 08.15am the rand was bid at 10.1704 to the dollar from an overnight close of 10.1050. It was bid at 12.8079 to the euro from a previous 12.8177 and at 14.4827 against sterling from 14.4430 before.

The euro was bid at S$1.2596 from $1.2685 overnight.

A local trader said it was a case of the 'same old story' - weaker equities and the firmer dollar putting pressure on emerging market currencies.

He added that he did not think the latest news from Zimbabwe was having an impact on the rand as the story had been around for some time and markets, for now, were ignoring domestic fundamentals. He expects the rand to trade in a 10.15 to 10.30 range on the day.

Business Day is reporting that Zimbabwean Prime Minister Morgan Tsvangirai is leading a mission to South Africa today for "urgent" talks with President Kgalema Motlanthe on a US$1bn assistance package to revive Zimbabwe's shattered economy.

RMB analyst John Cairns said in his morning report that whether Zimbabwe will get it is uncertain. Western donors have made it clear that they will not help until either Mugabe goes or the power sharing deal is clearly working. "So South Africa would have to go it alone and we are talking real money here."

"If it is agreed, the money would presumably be paid in ZAR and so not actually imply any foreign exchange transaction and would presumably also open up the way for Zimbabwe to formally adopt the ZAR, although confusingly Governor Mboweni says he has not been approached on the issue," said Cairns.

Speaking in Johannesburg on Thursday night Mboweni said that it appeared all the talk of the rand becoming legal tender in Zimbabwe was a rumour as neither he nor the finance ministry had been approached in this regard.

"As far as I'm concerned, it's a rumour," he said.

Cairns added that both the aid and the rand adoption are on their own mostly meaningless for the rand in a real sense.

"Zimbabwe, of course, will never have the ability to print anything but Zimbabwean dollars and so ultimately we should care about what happens there as much as we do about what is happening in Lesotho or Swaziland (who already use the ZAR), which is to say not at all. Still, it is possibly a negative by association," he said.

"Also the fear must be that $1bn in aid (even if classified as a "loan", South Africa is surely unlikely to ever get the money back) would be the first of many calls on our fiscus," he added.

He said the USD/ZAR may consequently be on the back foot today.

"Luckily international conditions aren't very worrying - the Dow hit a six-year low overnight but the gentle pace of the decline hasn't - as yet anyway - spilled into generalised global panic. 10.00 - 10.28 for the day, with risks still strongly to a break on the topside given the international news only keeps getting worse. Event risk today comes from the US CPI data this afternoon," he said.

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