Johannesburg - The rand remained firmer against
the dollar in noon trade on Wednesday. It was tracking a euro that
earlier had hit its highest level since December 2011 against the
greenback on renewed optimism for a deal on the restructuring of
Greece's debt.
"Everything looks set for a risk-on scenario but we need this
to be confirmed by an actual announcement on Greece," a local currency
trader said.
"Dollar rand has touched 7.52 but it needs to make a
significant break at that level to open up some downside," he added.
At 11:34 local time, the rand was bid at R7.5424 to the dollar
from its previous close of R7.5579. It was bid at R10.0084 to the euro
from R10.0159 before, and at R11.9998 against sterling from R12.0110
previously.
The euro was bid at $1.3270 from its previous close of $1.3248.
RMB said in a note on Wednesday morning that Greek politicians
had missed yet another deadline to agree on new austerity measures.
"According to an official this is because of missing
paperwork, the same excuse given for not meeting Monday's deadline. The
dog ate my homework, ma'am."
RMB added what was really going on seemed to be that the
decision makers did not want to take the political hit from supporting
yet new pain for Greek voters "and, in contrast to the rest of us, see
no need for urgency".
At least there was optimism that they were edging "towards picking up a pen and signing the paper".
"We might have to wait right until the February 15 deadline of
deadlines for this to actually happen but for now the market's mood has
switched to moderate optimism, this is against a cautious tone earlier
in the week," RMB noted.
The bias on the rand would then switch back towards moving stronger.
"Whether it can break into new territory is open to question;
our compatriot currencies seem becalmed - trading in the same ranges as
the past two days in early Asian trade.
"If there is going to be a break lower, US$/ZAR rather than EUR/ZAR is where it will happen."
Meanwhile, Dow Jones Newswires reported that in the foreign
exchange markets, the euro was steady after tapping an eight-week high
on Tuesday on Greek optimism.
Investors hoped that Greek lawmakers were close to a deal on
the restructuring of Greece's debt, following reports that the European
Central Bank was ready to make key concessions over its holdings of
Greek bonds.
The Wall Street Journal reported that the ECB was ready to
exchange its holdings in Greek government bonds with the European
Financial Stability Facility at a discounted price, which could pave the
way for the beleaguered, debt-ridden country to tap the first tranche
of its second bailout facility.
Unsurprisingly, there were both good and bad points to be digested.
Deutsche Bank strategist Jim Reid said, "Under the proposal,
the ECB won't make a loss on the transaction and it could help reduce
Greece's debt load by as much as EUR11 billion. The bad news is that
there are further signs of economic and fiscal slippage in Greece."