Johannesburg - The rand was weaker in afternoon
trade on Monday as tension between Germany and Greece raised the
possibility of a breakup of the eurozone.
"The market is very jittery right now, so the flight is into safe havens such as the US dollar," a local trader said.
At 16:00 local time the rand was bid at R8.1853 to the dollar
from Friday's close of R8.0965, Thursday's close of R8.0236, Wednesday's
close of R7.9993, and Tuesday's close of R7.9010. It was bid at
R10.5097 to the euro from R10.4506 before, and at R13.1563 against
sterling from R13.0244 previously. Prior to Friday, the rand was last
above R13 per pound sterling on December 16 2011.
The euro was bid at $1.2834 from Friday's close of $1.2893 and Thursday's close of $1.2935.
Dow Jones Newswires reported that the prospects for the US
currency haven't looked so good for quite some time. The euro, which has
spent many months largely ignoring the eurozone debt crisis, is now on
the slide as Greece edges closer to doing the unthinkable - bringing
back the drachma. The yen, which has long been an alternative or even
superior safe haven to the dollar, is likely to lose favour after the
Japanese prime minister vowed to halt its rise.
Germany probably sidestepped a double-dip recession in the
first quarter, as resurgent industrial production and record external
trade helped drive away the economic clouds settling over the rest of
Gross domestic product (GDP) data due to be published on
Tuesday is likely to show Europe's largest economy grew by 0.1% between
January and March, after contracting by 0.2% in the final quarter of
2011, according to analysts surveyed by Dow Jones Newswires.
While seemingly meagre, such growth would underline Germany's
impressive resilience to the eurozone's two-year-old sovereign debt
By contrast, the bloc as a whole is forecast to have sunk into
technical recession in the first quarter - defined as two consecutive
quarters of shrinking gross domestic product - following Monday's
weaker-than-expected industrial output data.
Even as economies across peripheral Europe have slumped into
vicious recessions, Germany's economy expanded by 3% last year and as
much as 3.7% in 2010. German unemployment is at a two-decade low of 6.8%
and falling, corporate profits remain close to record levels and
confidence indicators point to ongoing growth.
Last week, the economy ministry reported a
stronger-than-expected 2.8% rebound in industrial production in March.
That means industrial production rose 0.1% in the first quarter despite a
weather-related dip in February. A drop in industrial production was a
key reason for Germany's fourth-quarter GDP contraction.
Meanwhile, exports and imports both hit record highs in March,
driven by business with countries outside the European Union.