Rand tad softer on Greek concerns

Johannesburg - The rand was a tad softer against the dollar in quiet midday trade on Tuesday as it tracked a euro that was slightly stronger despite concerns about the Greek debt talks.

"The rand has ignored all the local news such as the reserves and unemployment rate. It is just tracking the euro, which in turn is being moved by shifts in sentiment over the Greek debt talks or lack thereof," a local currency trader said.

At 11:46 local time, the rand was trading at R7.5581 to the dollar from its previous close of R7.5469. It was trading at R9.9261 to the euro from R9.9006 before, and at R11.9460 against sterling from R11.9356 previously.

The euro was trading at $1.3141 from its previous close of $1.3117.

The South African Reserve Bank (Sarb) said dollar-denominated holdings of gold and foreign assets rose by US$2.59bn to US$51.451bn in January from US$48.860bn in December.

The latest official jobs data shows that employment grew by 179 000 in the fourth quarter compared with the third quarter and was up 365 000 (one thousand jobs per day) compared with the fourth quarter 2011 taking the unemployment rate down to 23.9% in the fourth quarter 2011 from 25.0% in the third quarter and 24.0% in the fourth quarter 2010, Statistics SA (Stats SA) said on Tuesday.

The 365 000 increase in 2011 followed two successive net declines of 118 000 and 777 000, in employment, in 2010 and 2009 respectively. The total employed figure of 13.497m in the fourth quarter 2011 was therefore still 530 000 below the fourth quarter 2008 peak of 14.027m.

Meanwhile, Dow Jones Newswires reported that the euro had come under pressure against the dollar and yen during Asian trading on Tuesday as a surprise decision by the Reserve Bank of Australia to keep its rates unchanged and prolonged uncertainty over Greek debt negotiations pushed down the common currency.

The RBA's decision to maintain its benchmark interest rate at 4.25% surprised the market, which had expected the central bank to cut the rate to 4.00%.

The Australian dollar rose sharply after the announcement, reaching a six month high of US$1.0811 against the dollar. The surprise move by the RBA meant the euro slid to a record low against the Aussie, trading at AU$1.2134.

Uncertainty over Greek debt negotiations also lingered, with Greek Prime Minister Lucas Papademos expected to meet today with political leaders in a bid to strike a deal on austerity measures, after skipping talks on Monday and failing to wrap up negotiations during the weekend.