Johannesburg - The rand was flat against the
dollar in noon trade on Tuesday as it tracked a euro that had been
flustered by reports that Greece might still need a third bailout.
"The euphoria is wearing off as the Greek deal was already priced into the markets," a local currency trader said.
"The markets are still worried about Greece and certain news reports haven't helped," he said.
"I see a weaker euro looming and therefore a weaker rand as
markets haven't been wowed by the approval of the second Greek bailout,"
the trader said.
At 11:37 local time, the rand was bid at R7.6962 to the dollar
from its previous close of R7.6805. It was bid at R10.1994 to the euro
from R10.1480 before, and at R12.1913 against sterling from R12.1587
The euro was bid at $1.3259 from its previous close of $1.3209.
RMB said in a note on Tuesday morning that the market had
responded towards the Greek bailout agreement with a big yawn.
"After weeks of anxiously waiting, the deal is an anti-climax.
Part of the reason is that some eurozone members do not believe a
second bailout will resolve Greece's problems.
"Particularly damning has been a strictly confidential report
prepared for eurozone members, obtained by the Financial Times,
suggesting another bailout will be needed. Surprise, surprise, the
bailout simply means that Greece lives to die another day."
Meanwhile Dow Jones Newswires reported that although the euro
was still up against the dollar in European markets, trading had been
Commerzbank said scepticism was justified and added that even
with the Greek bailout, the majority of market players were finding it
hard to believe that Greece would get through to 2020 without a further
Many investors were concerned that the Greek general election,
expected in April, might bring in a government unwilling or unable to
implement stringent austerity measures.
In addition to this, the UK's Financial Times reported that
Greece might still need a third bailout as the forced austerity could
cause debt levels to rise, and its debt restructure could prevent Greece
from ever returning to financial markets.
"The crisis marathon is not over," warned Carsten Brzeski,
economist at ING Bank NV. "The combination of more austerity, social
unrest and European impatience could become explosive, with a high risk
that the Greek crisis could still derail."
Brzeski added that the second bailout package had again bought
time for other "peripheral" eurozone countries to show that they were
different from Greece and to put all available "anti-contagion
firewalls" into place.