Rand firmer, euro impacted by rumours

Johannesburg - The rand remains slightly firmer against the dollar in noon trade on Monday as it tracks a euro that has been modestly impacted by rumours that there will be a delay to Greece's second bailout package.

With no economic data due on Monday and US markets closed for President's Day, the euro is prone to move on any news about Greece or the eurozone.

"It's a big day for Greece and it seems as though European finance ministers will at last approve the bailout," a local currency trader said.

"There was also the easing of reserve requirements for banks by China over the weekend and this has impacted favourably on the rand," he said.

The trader said that volumes were "a bit lower" as the US celebrated a public holiday. He confirmed that the euro had "come off slightly" during morning trade on rumours that the bailout would be delayed. "But it wasn't a big reaction and we are looking for further strength in the rand."

At 11:42 local time, the rand was bid at R7.6779 to the dollar from its previous close of R7.6834. It was bid at R10.1489 to the euro from R10.1728 before, and at R12.1746 against sterling from R12.2227 previously.

The euro was bid at $1.3218 from its previous close of $1.3223.

RMB said in a note on Monday morning that it appeared as though Greece would "live to die another day".

"There are reports that telephonic talks between the eurozone finance ministers over the weekend went very well and they are more or less set to approve Greece's second bailout in face-to-face talks that start at 18:00 SA time today."

RMB said that if a bailout was forthcoming, it would move Greece away from the brink of a disorderly default.

"This doesn't imply that Greece's problems are over. There are questions on whether enough debt is being written off, and whether Greece will implement its fiscal targets and enough structural reforms to get the economy growing again."

Meanwhile Dow Jones Newswires reported that eurozone finance ministers were scheduled to meet in Brussels to discuss the implementation of Greece's rescue package. The deal was widely expected to be signed off.

UniCredit said: "Chances that a deal will be agreed have increased, as the Greek government approved additional measures to meet the extra budget cuts (€325m) demanded by the troika."

However, there was some confusion on Monday after a statement on the Finnish finance ministry's website that said Greece's second bailout would likely get final approval in the week starting March 12. The euro slipped momentarily against the dollar on the news.