Johannesburg – The rand was still under pressure in midday
trade on Friday but off its worst levels seen at the start
of the trading
local trader said the local unit was tracking the euro and developments in Europe including
the pending vote by the German parliament on the
package for Greece and election results in the UK which indicate a hung
The latest news is that Germany's lower house of parliament has approved the country's
contribution of up to
€22.4bn in emergency loans to Greece. The bill now
goes to the upper house of parliament later on Friday.
The rand gained 34c against the British pound in early trade as the currency came under
pressure in light of the electoral uncertainty.
the rand was bid at R7.7100 to the dollar from R7.7442 at its previous close. It
was bid at R9.8352 to the euro from its previous close of R9.7923 and was at
R11.2617 against the sterling from R11.5210.
The euro was bid at $1.2739 from $1.2626 previously.
A local trader
said:" The rand is still very volatile, eyeing the developments in Europe, including
the election results in the UK, and whether the German parliament secures
the rescue package for Greece."
Meanwhile, Dow Jones Newswires reports that an uneasy calm in global financial markets
helped the euro to rebound Friday but the currency is still seen very much at
risk from further losses.
Help for the euro came in the form of soothing words from German Finance Minister Wolfgang
Schaeuble, who said that solidarity with Greece cannot be allowed to fail.
Moody's positive comments about Italy, claiming that the country has an encouraging record in
turning around its public debt trend also helped to boost support after the
single currency had been sent plummeting late Thursday.
the moment, financial markets are waiting for confirmation that parliaments in both
Germany and Italy have voted to support Greece's rescue package.
Sentiment has also been boosted by news that finance ministers from the Group of seven
leading industrial nations plan to hold a telephone conference call later on Friday to
discuss developments in Greece.
Dow Jones Newswires reports meanwhile that sterling has revived a little on Friday as the
prospect of a Conservative Party-led coalition taking power after all improves
Liberal Democrats leader Nick Clegg has said the party with the most parliamentary seats
has the right to try and form a government. This appears to suggest his party
could throw its lot in with the Conservatives, who won the seat count in
Thursday's general election despite missing out on an overall majority.
Sterling had been plumbing one-year depths against the dollar, at $1.4477, as markets wrung
their hands at the political mess cluttering the path to essential reduction
of the UK's massive debts. However, the pound rose to $1.4650 when Clegg
made his remarks. The markets feel a Conservative-led administration will
be more forthright in tackling the UK's borrowing and protecting its gold
standard credit ratings. At 10:10 GMT, GBP/USD was at $1.4632.
The June gilt
contract has so far failed to benefit, however, and last stood at 115.80,
substantially lower than the new contract high of 118.51 hit late on Thursday after the
strong losses on Wall Street, and remains very close to the day's lows.
the outcome might well eventually be a minority Conservative Government, the
likelihood is that there will have to be a lot of messy, and on occasion ugly
"horse trading" before the country gets to that stage," said
Marc Ostwald, a Strategist
at Monument Securities.
- I-Net Bridge