Johannesburg - The rand firmed against the dollar
in noon trade on Friday as it tracked a euro that had been boosted by
hopes that Greece's second bailout would get the go-ahead at the
eurozone finance ministers' meeting on Monday.
"Given another light day in terms of data flow, the fixation
with the ongoing Greek talks is likely to continue," a local analyst
said.
At 11:43 local time, the rand was bid at R7.7428 to the dollar
from its previous close of R7.7653. It was bid at R10.1825 to the euro
from R10.1947 before, and at R12.2626 against sterling from R12.2654
previously.
The euro was bid at $1.3161 from its previous close of $1.3127.
RMB said in a note on Friday morning that for the rand, two-way risks were now evident.
Arguing for the downside, RMB added that the rand had lagged
the recovery compared to its compatriot currencies while further gains
in US equities would result in the Dow breaking 13 000 and the
S&P500 the 1 360 level. Both are key psychological and technical
levels.
The main threat to the topside remained the growing stress in
Europe "and the ability of the Greeks to break the charity plate".
However, the markets were more positive today about Greece, RMB added.
"It now seems we may have a deal on Monday but of course, by later this afternoon it could all be off again."
Meanwhile, Dow Jones Newswires reported that investors in
Europe had welcomed signs that Greece was edging closer to securing a
second bailout.
At a briefing on Thursday, Greek government spokesperson Pantelis
Kapsis said Greece expected eurozone finance ministers to approve the €130bn bailout on Monday.
German sources said on Thursday that the plan to delay the
overall deal to Greece by providing the country with a bridging loan to
repay the March 12 bond redemption had been dropped.
At the same time, investors welcomed news that the European
Central Bank planned to swap its Greek debt holdings for new bonds once
debt-restructuring negotiations were complete.
As well as the developments in Greece, sentiment got a boost
from encouraging US data released on Thursday. Initial jobless claims
figures for last week beat expectations, falling to the lowest level in
nearly four years. Meanwhile, the Philadelphia Fed index for February
came in better than expected, as did January housing starts figures.
Despite the gains, market participants warned that challenges lay ahead.
"It pays not to get too carried away given we've seen so many
false dawns over the past few months," said Michael Hewson at CMC
Markets.
"As with all things to do with Europe, significant obstacles
still remain with tough conditions to be laid down in exchange for the
aid, which could see Greece baulk at the fiscal oversight demanded," he said.