Money SA economy
The rand was on the back foot again in midday trade, having been forced to give up earlier gains, amid a rise in risk aversion as the Greek debt issue resurfaces.
At 11.45am the rand was bid at R7.46 to the dollar, R9.98 to the euro and R11.51 to the pound. The euro was bid at $1.3362 from $1.3388 previously.
"The Greek story has raised its ugly head again, sparking a rise in risk aversion and a flight from riskier currencies," a local currency trader said.
RMB analysts said in their morning report that the EUR/USD slid below 1.34 yesterday as Greek borrowing costs surged to unprecedented levels, emphasising intense market uncertainty.
"A drag on global growth, which the IMF now estimates at 4.2% for 2010, could provoke safe-haven purchases of USD-denominated assets and dim the allure emerging market currencies such as the ZAR, which continues to revel in the global recovery," they said.
For now, the USD/ZAR is pivoted around 7.40 and seems relatively immune to the fall-out in EUR/USD but could exhibit increased volatility should the Greek situation continue to deteriorate, RMB added.
On the local front, markets will eye Reserve Bank Governor's speech to the BER's economic conference in Sandton for any clues as to the direction to interest rates.
