The rand remained softer against the dollar in noon trade on Tuesday, as it tracked a weaker euro.
“It's the uninspiring eurozone GDP figures that have helped to drag the single currency down, among other things,” a local rand trader said.
“US stocks are also expected to start lower.”
He put the dollar/rand in a range of 7.10 to 7.20 for the rest of the day.
At 11:27 local time, the rand was bid at 7.1483 to the dollar from its previous close of 7.0618. It was bid at 10.2904 to the euro from 10.1920 before, and at 11.6861 against sterling from 11.5610 previously.
The euro was at US$1.4393 from US$1.4432 before.
Meanwhile Dow Jones Newswires reported that the eurozone economy grew more slowly in the second quarter than at any time since the end of the recession in the same period of 2009, making it more difficult for the currency area to tackle its mounting fiscal problems.
The European Union's official statistics agency Eurostat on Tuesday said the combined gross domestic product of the eurozone's 17 members grew by 0.2% from the first quarter, and was up 1.7% from the second quarter of 2010.
The quarter-on-quarter expansion was the smallest since the second quarter of 2009, when GDP fell by 0.2%, the last of five straight quarters of contraction that accompanied the global financial crisis.
It was a weaker outcome than had been expected. Economists surveyed by Dow Jones Newswires last week had estimated that the currency area's GDP grew by 0.3% on the quarter, and 1.8% on the year.
That marked a dramatic slowdown from the first three months of the year, when eurozone GDP expanded by 0.8% on the quarter. The abruptness of the slowdown raises the possibility that the European Central Bank would soon have to reverse the hikes to its key interest rate announced in April and July.
It would also cast a pall over a crucial meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy in Paris later on Tuesday. They were meeting to seek ways to reassure investors and maintain access to international bond markets for the governments of Italy and Spain.
But the German economy grew by just 0.1% in the second quarter, while the French economy didn't grow at all. That raised doubts about the ability of the eurozone's “core” to support weaker economies on its southern flank. - I-Net Bridge
