Money SA economy
The rand recovered strongly against the US dollar on Monday, as risk appetite returned to markets following the announcement of a €750 billion bailout package for the eurozone.
At 3.41pm the rand was bid at R7.44 to the dollar, R9.64 to the euro and R11.16 to the pound. The euro was bid at $1.2937 from $1.2989 previously. At one stage on Friday the rand touched an intraday worst level of R7.84/$, and therefore its gains today amount to almost 40c.
"We have seen the rand rebound quite nicely amid an improved appetite for riskier assets by investors. The bailout out package for the indebted eurozone nations had everything to do with the strength of the rand. The local unit should stabilise around 7.38-7.55 to the US dollar in the near term," a local dealer said.
Dow Jones Newswires reported that with the immediate euphoria cooling after a massive support programme for debt-troubled euro-zone countries, the euro pared early gains on Monday morning to dip below $1.29.
The common currency had overnight surged to nearly $1.31, as the unexpectedly large European Union emergency package and the joint efforts with the European Central Bank and the International Monetary Fund lifted hopes that immediate threats to the European financial system have been contained.
The package totals the equivalent of nearly $1 trillion in funds, with the European Central Bank agreeing to start buying government bonds in an effective extension of quantitative easing.
