Money SA economy
The rand was little changed from its overnight levels on Wednesday morning, with no fresh news to offer direction.
As was the case earlier this week, attention is still focused on the pace of the global recovery.
At 9am local time the rand was bid at R7.63 to the dollar, R11.47 to the pound and R9.33 to the euro. The euro was bid at $1.2234 from $1.2189 overnight.
RMB analysts noted in their morning report the threatened European liquidity squeeze because of the expiration of the one year liquidity funding from the ECB to the banking sector on Thursday, is causing major ructions in the markets.
"European banks and the EUR are under pressure and this has spiralled into a bout of global risk aversion. The ECB is taking steps to limit the fallout, providing ample shorter-term funding to the market. This might sound very technical but the bottom line, in our view, is that this squeeze seems merely a temporary blip.
"The only lasting impact is that the weakest European banks, notably those in Spain, will be left even weaker from Friday onwards while the stronger banks ride the wave with little problem.”
Dow Jones Newswires reports that the euro is stronger against the US dollar and the yen, as players come in to cover short positions on the single currency.
The dollar and yen posted broad gains in US trading as investors shunned assets closely tied to growth after disappointing economic data led to concern the global recovery could be losing steam.
