Rand gains on the dollar at noon

The South African rand tracked a firmer euro in midday play on Tuesday.

The single currency had slipped against the dollar in the morning session, after Moody's downgraded Portugal's credit rating by two notches to A1, taking the rand with it. However, a trader noted that the euro had since shrugged off the news on Portugal, regaining some of its earlier losses against the greenback.

At 11.43am local time the rand was bid at R7.55 to the dollar, R9.52 to the euro and R11.42 to the pound. The euro was bid at $1.2574 from $1.2586 overnight, having reached a morning low of 1.251.

A local trader said: "We saw rand weakness this morning on the back of a weaker euro after Moody's downgraded Portugal's credit rating. The euro has since recovered slightly from that news, and as a result we are seeing a firmer rand."

Dow Jones Newswires reports that the Portuguese downgrade has helped to put the euro zone's sovereign-debt crisis back as a main focus for the market, especially after euro-zone finance ministers who met on Monday decided to create new sanctions against member countries that run excessive public deficits.