Money SA economy
The rand held up well in midday trade on Friday as the euro dipped under 1.25 against the greenback amid increasing concerns in the euro zone.
At 11.37am the rand was bid at R7.50 to the dollar, R9.83 to the euro and R10.89 to the pound. The euro was bid at $1.2462 from $1.2571 previously.
"The rand is a tad softer on the back of the euro's fall against the dollar, but considering where the euro is at, the local currency has held up quite well," a local trader said.
Dow Jones Newswires reported that the euro fell to a new 14-month low Friday, just under $1.2500, on fears of public unrest in the euro zone and on growing concern over the credibility of the European Central Bank.
Although both Spain and Portugal have now announced plans to reduce their budget deficits with spending cuts, this has failed to boost confidence in the euro as investors now worry about the threat of civil strife in these countries, as well as in Greece.
Spain's largest trade union has already called for the public sector to go on strike over the austerity measures. There is rising concern that the central bank has compromised its independence as well as skewed pricing in euro zone bonds, which is now determined more by the ECB than by the open market.
