BLBG:Rand Falls for 2nd Day to Dollar as Europe Debt Concern Saps Risk Demand
The rand declined against the dollar for a second day after a surge in Italy’s borrowing costs fueled concern that Europe’s debt crisis is set to worsen, damping demand for riskier, emerging-market assets.
South Africa’s currency retreated 0.2 percent to 8.0366 per dollar as of 9:04 a.m. in Johannesburg. Against the euro, the rand gained 0.1 percent to 10.9188.
The dollar rose against all except one of its 16 most- traded peers as Spain prepares to sell 4 billion euros ($5.4 billion) of debt on Nov. 17 after Italy’s borrowing costs surged to the highest level since 1997 at a bond auction. A report today is forecast to show German investor confidence fell to a three-year low. Emerging-market stocks tumbled for the first day in three and commodity prices declined.
“The rand should trade with a weaker bias as politicians in Europe continue to struggle to convince markets that they are serious about keeping the euro intact,” John Cairns, a currency strategist at Rand Merchant Bank in Johannesburg, wrote in a research note.
South African bonds fell for a fifth day, the longest losing streak since the six days ending June 15. The yield on 6.75 percent securities due 2021 climbed one basis point, or 0.01 percentage point, to 8.06 percent.
To contact the reporter on this story: Robert Brand in Cape Town at rbrand9@bloomberg.net
To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net
