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Rand weakens as risk appetite sours

Dec 21 2012 09:34
Reuters

Johannesburg - The rand weakened against the dollar on Friday with global risk appetite turning negative as negotiations on measures to avoid a recession in the United States stalled. 

The currency was down 0.74% at R8.5375 at 07:12 GMT after ending Thursday's New York session at R8.4750. 

The rand tracked the euro, which fell against the dollar on Friday as a deal to head off $600bn worth of tax hikes and spending cuts that could push the US economy into recession next year remained illusive. 

With a dearth of local economic data and a conference of the ruling ANC having allayed the worst investor fears over policy changes in Africa's biggest economy, market focus is now largely on the so-called US "fiscal cliff". 

"The probability that a solution will be found as early as this weekend is low. Markets at least in the short term are likely to respond negatively," Tradition Analytics said in a note. 

Government bonds were flat in thin trading as the year draws to a close, with the yields on the 14-year and three-year issues each unchanged from Thursday's closing levels at 7.21% and 5.3% respectively.

 

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rand  |  markets  |  us fiscal cliff

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