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Johannesburg - The rand continued to slide in
Monday midday trade, with analysts citing the new political situation in
Greece and France as the key factor.
Both countries emerged from weekend elections with new right-wing leadership which is opposed to austerity measures in Europe.
In France, socialist candidate François Hollande claimed the presidency in a bruising battle with Nicholas Sarkozy, while in Greece voters delivered a stinging rejection of incumbent Socialist and Conservative parties.
"The rand weakened as a direct result of the outcome of elections in Europe, as well as the UN payroll data last week; we don't expect much change in the local currency in today's trade," said Bridget Taylor, forex trader at Nedbank.
At 11:40 local time the rand was bid at R7.8318 to the dollar from its previous close of R7.8210. It was bid at R10.1870 to the euro from R10.2300 before, and at R12.6407 against sterling from R12.6973 previously.
The euro was bid at $1.3015, from its previous close of $1.2985 and $1.3087 late on Friday.
RMB in its morning report said that the rand finally woke from its slumber on Friday and reacted to all the bad news.
"With the Greek elections not generating a workable pro-austerity government, expect volatility today with moves into the 7.90s," warned RMB.
The bank added that the victory of Hollande in the French elections was expected but nevertheless left some questions about Europe's commitment to austerity and the workability of the key French-German axis.
RMB added that much more concerning were the results of the Greek elections.
"It's clear that any government is going to be very unstable. At the very least the political uncertainty makes dealing with the economic problems more difficult, at the worst it means that Greece could leave the eurozone this year," said RMB.
Standard Bank concurred with RMB saying that the rand had weakened significantly since Friday, once again falling victim to global currents.
"Firstly, the disappointing payrolls data on Friday afternoon sapped risk appetite and saw the rand fall to its lowest level in over a week. Then, the victory of socialist Hollande in this weekend's elections in France has seen the market's worst fears realised," Standard bank said.
Dow Jones Newswires reported that the euro was broadly weaker after Greek voters rejected the austerity policies of the incumbent government and as Francois Hollande ousted Nicolas Sarkozy to become France's first Socialist president in nearly two decades.
Analysts said the results clouded the outlook for a solution to the European debt crisis and expected the political upheaval to keep the single currency weak in the near term.
Greek voters rejected the incumbent Socialist and Conservative parties, with many shifting their support to smaller left- and right-wing parties that have campaigned against the austerity programme the nation needs to implement in order to receive continued financing from its European partners and the International Monetary Fund.
Both countries emerged from weekend elections with new right-wing leadership which is opposed to austerity measures in Europe.
In France, socialist candidate François Hollande claimed the presidency in a bruising battle with Nicholas Sarkozy, while in Greece voters delivered a stinging rejection of incumbent Socialist and Conservative parties.
"The rand weakened as a direct result of the outcome of elections in Europe, as well as the UN payroll data last week; we don't expect much change in the local currency in today's trade," said Bridget Taylor, forex trader at Nedbank.
At 11:40 local time the rand was bid at R7.8318 to the dollar from its previous close of R7.8210. It was bid at R10.1870 to the euro from R10.2300 before, and at R12.6407 against sterling from R12.6973 previously.
The euro was bid at $1.3015, from its previous close of $1.2985 and $1.3087 late on Friday.
RMB in its morning report said that the rand finally woke from its slumber on Friday and reacted to all the bad news.
"With the Greek elections not generating a workable pro-austerity government, expect volatility today with moves into the 7.90s," warned RMB.
The bank added that the victory of Hollande in the French elections was expected but nevertheless left some questions about Europe's commitment to austerity and the workability of the key French-German axis.
RMB added that much more concerning were the results of the Greek elections.
"It's clear that any government is going to be very unstable. At the very least the political uncertainty makes dealing with the economic problems more difficult, at the worst it means that Greece could leave the eurozone this year," said RMB.
Standard Bank concurred with RMB saying that the rand had weakened significantly since Friday, once again falling victim to global currents.
"Firstly, the disappointing payrolls data on Friday afternoon sapped risk appetite and saw the rand fall to its lowest level in over a week. Then, the victory of socialist Hollande in this weekend's elections in France has seen the market's worst fears realised," Standard bank said.
Dow Jones Newswires reported that the euro was broadly weaker after Greek voters rejected the austerity policies of the incumbent government and as Francois Hollande ousted Nicolas Sarkozy to become France's first Socialist president in nearly two decades.
Analysts said the results clouded the outlook for a solution to the European debt crisis and expected the political upheaval to keep the single currency weak in the near term.
Greek voters rejected the incumbent Socialist and Conservative parties, with many shifting their support to smaller left- and right-wing parties that have campaigned against the austerity programme the nation needs to implement in order to receive continued financing from its European partners and the International Monetary Fund.
