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Johannesburg - The rand fell as much as 1.7% against the
dollar in nervous trade on Wednesday, ahead of more European talks about
Greece's debt problems and amid concerns about weakening domestic growth.
Finance Minister Pravin Gordhan was due to speak in
parliament before a media briefing where he might comment on reports that South
Africa and other emerging markets are mulling buying European debt to support
the struggling European currency.
The rand fell to R7.4250 to the greenback earlier in
Wednesday's session and was at R7.40 by 06:55 GMT, down 1.38% from Tuesday's
close.
Reuters data showed the rand was the worst performer among a
basket of 20 emerging market currencies.
Traders said it was playing catch -p after holding up
relatively well as its peers fell sharply on risk aversion in recent months.
"We've gone through quite severe technical levels. We
also maintained that range below R7.0/dollar for a long period of time when
everyone else was moving a lot. We then broke through that level and that was
quite a significant technical level," said Nedbank head of institutional sales
Brigid Taylor.
A convincing break above R7.38 would open up the rand to its
next technical support at R7.52.
Any confirmation that Brazil, Russia, India, China and South
Africa - the Brics grouping - may take steps to increase their holdings of
euro-denominated bonds to help ease Europe's debt crisis, could hurt the rand,
Taylor said.
"It would be potentially a little bit negative purely
because of the uncertainty regarding the eurozone," she said.
"In South Africa we need to keep our house in order
before we worry about bailing out other weaker defaulting nations."
Government bonds were relatively steady after a heavy
sell-off on Tuesday pushed yields to multi-week highs.
The yield on the benchmark four-year bond was up 10 basis
points at 6.945% while that for the longer-dated 2026 issue edged up just 2.5
basis points to 8.325%.
The Johannesburg stock market's Top 40 - (Tradeable) [JSE:J200] index of blue chips opened down 0.32%.
