The rand was softer against the dollar in early morning trade on Monday as it tracked the euro.
Articles
Rand dips vs dollar on euro sell-off
"We have seen some euro stability though this morning," a local currency trader said. "We see the rand/dollar at 6.77 to 6.82 to start off with, then after that, let's see what the euro does," he added.
At 8.42am local time, the rand was bid at R6.8015/$ from R6.7506/$ at Friday's close. It was bid at R9.7571/€, from R9.7577/€ before, and at R11.0219/£ from R11.0301 previously. The euro was at $1.4349 from $1.4331.
Meanwhile, Dow Jones Newswires has reported that the dollar was slightly firmer against the yen in Asian trade on Monday, but the greenback and the euro would likely be pressured lower this week as global slowdown concerns and Greek debt problems encouraged investors to park funds in the safe-haven yen.
The dollar received a brief lift in early trade as importer purchases and stop-loss buying by short-term speculators kicked in. But the greenback soon lost momentum as a risk-averse mood prevailed amid falls in Asian share prices following losses in the US stock market on Friday.
"Upward pressure on the yen to avoid risks is likely to flare up since the Nikkei and other Asian share prices are on a declining trend," said Hideki Hayashi, global economist at Mizuho Securities.
The Greek debt impasse continued to put a cap on the euro. Jean-Claude Juncker, the head of the group of countries using the euro, said in a radio interview on Saturday that highly indebted Greece needed a "soft, voluntary restructuring" of its debt. Meanwhile, the European Central Bank has so far rejected any kind of restructuring.
"There could be still twists and turns" before a bailout plan for Greece is hammered out ahead of the European Union's leaders meeting on June 23-24, said Mizuho Securites' Hayashi.
"The euro may weaken to US$1.43, but a sharper fall like we saw in May to US$1.40 is unlikely, while its upside could be limited at about $1.4500," Hayashi said. The euro/dollar's direction was likely to be influenced by a slew of US economic indicators, including May retail sales on Tuesday and housing starts on Thursday, he said.
