THE volatile rand was firmer in afternoon trade on Friday on the back of improved sentiment about the European crisis, which has been affecting emerging markets throughout the week.
The rand recovered from its early-morning worst level in midday trade and continued to recover through the day.
"The rand strengthened ahead of the weekend mainly on improved prospects in Europe. Some fears on the euro crisis have been allayed and we have seen some profit taking," a local trader said.
At 4.05pm local time, the rand was bid at R8,3154 to the dollar from Friday’s worst level of R8,4457, Thursday’s close of R8,3606, Wednesday’s close of R8,3155, Tuesday’s close of R8,3275 and Monday’s close of R8,1983. Just a week ago the rand was below R8 per dollar.
It was bid at R10,5796 to the euro from R10,6089 before, and at R13,1519 against sterling from R13,1975 previously.
The euro was bid at $1,2721 from Thursday’s close of $1,2694.
Dow Jones Newswires reported that currency markets pulled back from the precipice in European hours on Friday, having looked ready to go over the top in early trade as the euro and Australian dollar sank against safer bets such as the yen and dollar.
That came amid a global slump in shares after poor US data added to the economic gloom and Moody’s, the rating agency, downgraded 16 Spanish banks, piling the pressure on that country after a day of bank-run denials and racketing up the euro zone crisis in the wake of Greece’s political deadlock.
The euro hit a four-month low of $1,2641 against the dollar, taking its losses for the week to 4,5%, but then steadied.
