BLBG:Rand Weakens on European Debt Crisis Concerns, Weakening Commodity Prices
The rand weakened against the dollar as concern that Europe’s debt crisis will persist curbed demand for riskier-, emerging-market assets.
South Africa’s currency declined as much as 1 percent and traded 0.8 percent weaker at 8.1654 per dollar as of 9:25 a.m. in Johannesburg, extending last week’s 0.6 percent retreat. It fell 0.3 percent against the euro to 10.8734.
The accord European Union leaders agreed to last week at a summit in Brussels, provides tighter budget rules and an additional 200 billion euros ($267 billion) to a euro war chest. The euro fell as much as 0.4 percent against the dollar before a German report tomorrow that economists say will show investor confidence in the region’s largest economy slid to a three-year low.
“Views on the EU summit are still mixed,” John Cairns, a currency strategist at Rand Merchant Bank in Johannesburg, said in e-mailed comments. “The new fiscal rules and the decision to bring forward the introduction of the new permanent bailout fund are being seen as positives, but questions remain on the talk of Eurobonds, ratifying the agreement and whether it’s legal to fund the IMF with sovereign reserves.”
To contact the reporter on this story: Stephen Gunnion in Johannesburg at sgunnion@bloomberg.net
To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net
