The rand decoupled from the euro in afternoon trading on Tuesday.
“The rand has had a good day as for the moment we seem to have decoupled from the weak euro. We are not out of the woods yet‚ but if we can get back below 8.30 than we are on our way there‚” a local trader said.
At 17:05 the rand was bid at R8.4447 to the dollar from Monday’s close of R8.4758‚ Friday’s close of R8.5721 and Thursday’s close of 8.5006. It was bid at R10.5135 to the euro from its previous close of R10.6063 and at R12.9712 against sterling from R13.0398 at its previous close.
The euro was bid at US$1.2457 from Monday’s close of $1.2504‚ Friday’s close of $1.2418 and Thursday’s close of $1.2364.
Dow Jones Newswires reported that Spain's budget minister urged eurozone partners to act faster to help support its banks‚ saying the government has lost access to capital markets because of steep risk premiums demanded by sovereign bond investors.
The ECB had room to cut interest rates in an effort to boost growth in Europe‚ the head of the International Monetary Fund‚ Christine Lagarde said in an interview with a Swedish newspaper.
Further monetary loosening by the Federal Reserve would compound the uncertainty already facing US businesses and households as a consequence of lawmakers' reckless fiscal policy‚ Dallas Federal Reserve President Richard Fisher said.
Bonds firm on stronger rand
South African bonds firmed in afternoon trade on Tuesday on the back of a stronger rand. Traders said volumes were subdued due to London not trading owing to a two-day public holiday in celebration of the Queen’s Diamond Jubilee.
At 17:15‚ the benchmark R157 bond was trading at 6.330 percent from Monday’s close of 6.355 percent and Friday’s close of 6.340 percent. The R207 was bid at 7.645 percent and offered at 7.615 percent from a previous close of 7.635 percent and the R186 was trading at 8.400 percent from its close of 8.390 percent.
The rand was bid at R8.4412 against the dollar from Monday’s close of R8.4758 and a worst level on Monday of R8.6291.