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Rand, bonds weaken on indebted Spain

Johannesburg - The rand weakened against the dollar on Monday and government bonds also eased as fears increased that Spain may need a full sovereign bailout, hitting global investors’ appetite for riskier emerging market assets.

The rand dropped almost 1% against the greenback to R8.3666 by 06:24 GMT after Friday’s New York close of R8.29. The rand was largely tracking a sharply weaker euro, the currency of South Africa’s largest trading partner.

The heavily indebted region of Valencia in eastern Spain said on Friday it would need financial help from Madrid, spooking financial markets and complicating central government efforts to stave off a full-blown sovereign bailout. 

“The announcement that Valencia, one of the Spanish regions, is troubled saw the euro come off aggressively,” said  Brigid Taylor, head of institutional sales at Nedbank.

“It has continued to weaken as concerns around debt default in the eurozone, as well as the pressure on Greece, escalate again.”

Government bond yields jumped, with the yield on the three year bond up six basis points to 5.450% while that on the longer dated paper rose 8.5 basis points to 7.28%.

 
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Rand - Dollar
19.05
-0.7%
Rand - Pound
23.98
-0.3%
Rand - Euro
20.55
-0.4%
Rand - Aus dollar
12.36
-0.1%
Rand - Yen
0.13
-0.7%
Platinum
894.10
-0.3%
Palladium
996.00
-0.6%
Gold
2,193.32
-0.1%
Silver
24.41
-1.0%
Brent Crude
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Top 40
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All Share
74,074
+0.2%
Resource 10
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Financial 15
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