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Rand rallies against the euro/dlr

Mar 04 2010 16:07

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Johannesburg - The rand rallied in the afternoon session on Thursday, breaking a key level of R10.25 against the euro.

The local currency also tested R7.42 against the dollar.

At 15:27 the rand was bid at R7.4377 to the dollar from R7.4840 at its previous close. It was bid at R10.1889 to the euro from its previous close of R10.2701 and was at R11.2343 against the sterling from R11.3117.

The euro was bid at $1.3662 from $1.3700 previously.

A local currency trader said: "We broke a key level of R10.25 against the euro, and R7.45 against the dollar. If we see that level consistently, the rand should ratchet down to R7.42."

The Dow Jones Newswires reported that the euro slipped against the dollar on Thursday as investors continued to worry whether Greece can get its fiscal house in order, while awaiting a morning European Central Bank press conference for any word on how the eurozone might support Greek efforts.

The ECB earlier left key eurozone rates unchanged.

Investors were be listening to the press conference with ECB President Jean-Claude Trichet for any mention of Greece, where issues of stressed sovereign debt have put the euro under pressure.

Meanwhile, the Bank of England earlier offered the pound some support after it also stood pat on key rates, while deciding against an expansion of the government's bond-buying program, known as quantitative easing.

BoE keeps rates unchanged

In a sign that the eurozone sovereign debt picture could brighten, the Greek government's offering for a 10-year bond attracted around €14.5bn in bids and the books have closed, the head of the country's debt management agency said on Thursday.

"We are very happy with the bid because the re-entry into the market is always challenging. It went very well," Petros Christodoulou told Dow Jones Newswires.

The government aimed to raise €5bn from the offering, but it was heavily oversubscribed.

If successful, the bond offering would prove a major relief for the government and increases the likelihood that it can get through the year without needing to draw on financial help from the EU or the International Monetary Fund.

Greece on Thursday offered additional austerity measures to cut stifling deficits.

"We still remain [down] on the euro, though the currency could be supported in the near-term by progress on the Greek austerity plan. Implementation, though, remains key," said Geoffrey Yu, currency strategist at UBS in London.

The Bank of England on Thursday stood pat on key UK rates on Thursday, keeping them at an all-time low of 0.5% for the 13th consecutive month, as analysts had expected.

In the wake of the BOE decisions, the pound was able to eke out a small gain on the dollar by early New York trading.

- I-Net Bridge

 
 
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