Rand tastes worst levels since 2002

JOHANNESBURG – The rand remained under pressure yesterday morning, struggling in the face of Greek debt negotiations and load-shedding.

“With Greek talks not going anywhere, other risk currencies selling off, Eskom’s woes and the unedifying spectacle of our state of the nation address coming up, it’s easy to think a decisive break higher is coming,” Rand Merchant Bank (RMB) said in an early morning note.

At 8:35am the rand was at R11,8594 against the dollar from a Wednesday close of R11,8006.

The rand hit an intraday low of R11,89 to the dollar on Wednesday, its weakest level since 2002, and far from this year’s high of R11,24, which it reached last week.

Against the euro, the local unit was at R13,4173 from a previous close of R13,3426 and was at R18,0471 against the British pound from a previous close of R17,9860.

The euro was at $1,1316 against the dollar from a close of $1,1309 previously.

Dow Jones Newswires said eurozone Finance ministers struggled to find a clear line on how to deal with Greece’s financial issues early yesterday in the light of what they said were mixed messages from the new government in Athens.

After more than six hours of negotiations, the ministers, along with the heads of the International Monetary Fund and the European Central Bank, pledged to keep talking in the coming days with the hope of coming up with a plan at their next meeting.

Comments were mixed after the meeting as the ministers failed to agree on a joint statement, despite what officials said were three rounds of extensive drafting.

Still, after the meeting, Luxembourg’s Finance minister said Greek officials and international lenders agreed, at least, on a process for talks in the coming days.

On the local front, concern about the effect on the economy of Eskom’s frequent load-shedding and the expectation that President Jacob Zuma’s state of the nation address yesterday night will not do enough to shore up investor confidence providing more ground for rand weakness.

RMB said data to watch included mining figures, which Statistics SA would release later in the morning, and US retail sales that were due out in the afternoon.

It said the rand would continue to watch local and international developments for further direction, but further weakness was likely.

– BD Live

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