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46 minutes ago
New South African banknotes will bear the image of former president Nelson Mandela, President Jacob Zuma has announced.
Feb 10 2012 18:19
The rand tumbled against the dollar in late afternoon trade as the local currency tracked a jittery euro.
Feb 10 2012 17:28
President Jacob Zuma will make an announcement "of national importance" on Saturday, says a central bank statement.
Johannesburg - A stronger dollar as a result of a rise in risk aversion kept the rand on the back foot in late trade on
Monday.
At 16:10 the rand was bid at 9.0585 to the dollar from an overnight close of 8.9555. It was bid at 11.7503 to the euro from a previous 11.6781 and at 13.2135 against sterling from 13.2043.
The euro was bid at US$1.2970 from $1.3044 overnight.
"The dollar is stronger on the back of a rise in risk aversion. We're also seeing a bit of short covering ahead of Wednesday's national elections. So the rand is a bit weaker at the moment," a local currency trader said.
RMB analyst John Cairns said in his morning report that it's election week in South Africa but, more importantly for the rand, it's earnings week in the US as the reporting season hits full speed.
The US equity markets have managed six straight weeks of gains, encouraged by better data and earnings. But the pace of gains has slowed markedly. And the hurdle gets higher as earnings expectations increase, he said.
US data at least should support the conjecture that the worst of the recession is behind us - the pace of the decline in durable goods and house sales is likely to slowdown. But the IMF is set to revise down its 2009 global GDP growth forecast (currently a 0.5% - 1% contraction, which could be revised as far as a 1.5% - 2% contraction) and warn of a prolonged
recession in the full release of its World Economic Outlook on Wednesday.
"Caution is already the watchword this morning as Asian stocks retreat, the yen strengthens on mounting risk aversion and euro/dollar drifts towards a test of 1.3000. The dollar/rand managed to finish last week under the 9.00 level but it seems that the impetus is not yet there for a push even lower.
"US earnings of course offer scope for major volatility, but for now look for a drift from 8.875 to above the 9.00 level. And if US equities and the rand falter, the reversal could be quite sharp.
"The local election, while the focus for the country, shouldn't affect the currency," he added.
- I-Net Bridge