The rand was flat against the dollar in noon trade on Tuesday on concerns about a global economic slowdown.
"The bad manufacturing figures out of the US yesterday have probably been the biggest factor influencing the rand," a local currency trader said.
"So it’s a case of ‘risk-off’ for now," he added.
At 11:46 local time, the rand was bid at R6.7299/$ from its previous close of R6.7200/$. It was bid at R9.5359/€ from R9.5761/€ before, and at R10.9348/£ from R10.9406/£ previously.
The euro was at $1.4174 from $1.4263.
RMB said in a morning note that today’s crisis was not only the state of the global economy but also troubles in the eurozone, as Italy’s government bond yields hit at a new record high and bank shares were plunging to worrying lows.
"It’s a crazy — and worrying — world that we live in -and a very difficult one to predict."
RMB added that at least one crisis had passed.
"The US House of Representatives passed the budget bill last night and we’ll get the same from the Senate tonight. A government shutdown/default has been avoided."
But the relief rally didn’t even last a day, RMB remarked.
"Markets dropped back sharply as the July US ISM index (equivalent to our Purchasing Managers Index) released late yesterday showed a drop in levels suggestive of only minimal growth in the world’s largest economy. This comes on top of similar poor data out of China and Europe (and above all South Africa). Double-dip fears are back."
In Europe things were going from bad to worse as Italian bond yields came under pressure.
"Another week of this and we’re going to be in a full blown financial crisis again."
Meanwhile Dow Jones Newswires reported that with the world’s forex reserve managers holding portfolio allocations of only 0.10 in Swiss francs, there would be further diversification into this currency.
Analyst Peter Rosenstreich said that Switzerland maintained a manageable 55% Debt/GDP ratio and solid public finances, and also that the euro and dollar were "damaged currencies."
"Finally, recent Swiss economic data has shown some deterioration but this is from a high level," he noted.
