Johannesburg, Feb 2 (I-Net Bridge) - The rand was softer against the
dollar in noon trade on Thursday as the euro slipped against the
greenback.
"There's been a euro sell-off," a local currency trader confirmed.
"Investors are worrying and waiting to hear any news about
Greece's negotiations and the longer it takes, the more uncertain market
participants will become.
"Under the circumstances, the rand hasn't done too badly."
At 11:38 local time, the rand was trading at R7.6960 to the
dollar from its previous close of R7.6626. It was trading at R10.1088 to
the euro from R10.0920 before, and at R12.1865 against sterling from
R12.1369 previously.
The euro was trading at $1.3136 from its previous close of $1.3169.
Standard Bank said in a note that in the absence of any
critical data out of the major economies today, there was the risk that
markets turned their focus back to the as-yet-unresolved debt debacle in
Greece.
"Comments by the Greek prime minister earlier this week
suggested that a successful conclusion to the negotiations was expected
by the end of this week. However, time is running out."
Meanwhile, Dow Jones Newswires reported that in foreign
exchange markets on Thursday, the euro failed to hold on to Wednesday's
strong gains against the greenback, while the dollar regained some of
its strength.
Negotiations between Greece and its private sector creditors
were reportedly close to coming to an agreement. But economist Dermot
O'Leary warned, "Greece is far from out of the woods even if agreement
on private sector involvement [PSI] is reached and hard default is
avoided."
"It looks likely that as well as PSI, there will have to be
official sector involvement at some stage in the future if debt
sustainability is to be achieved. That puts the European Central Bank's
holdings of Greek bonds firmly in the spotlight."
Standard & Poor's Ratings Services said on Thursday in a
press release that the eurozone should gradually climb out of its mild
recession in the second half of this year and into 2013, but darker
risks remained.
"The core countries will likely lead the way back to growth,
with other member countries delivering diverging performances,"
Jean-Michel Six, S&P's EMEA chief economist, said.
"We think the scale continues to tilt in favour of a mild
recession and a slow return to growth, although the risks of a gloomier
outcome have not diminished yet," Six said.