Money SA economy
A softer South African rand spiked to above R8.00/$ at its opening, triggered by a mispricing on the Tokyo futures exchange.
The local currency did however, dip back below R8.00/$ against the greenback.
At 08.55am the rand was bid at R7.88 to the dollar from R8.11 at its previous close. It was bid at R11.63 to the euro and at R12.96 to the pound. The euro was bid at $1.4756 from $1.4734 overnight.
RMB analysts John Cairns and Nema Ramkhelawan pointed to a brief freefall from the rand this morning. "Following the worst day for Wall Street in months on Friday, US small business lender CIT filed for bankruptcy over the weekend in what is one of the largest corporate failures in history.
US dollar/rand spiked immediately to 8.25 as trade opened in Asia - but this was a massive overreaction and we should come into regular trade at around 7.90 this morning" they said.
"Indeed, trade up at the highs was very brief and illiquid and the scope for getting any orders filled was almost non existent. Still, the spike does show just how nervous markets are - and how the rand is the obvious victim," the analysts said.
Dow Jones Newswires reported that the dollar recouped lost ground against the yen in Asia on Monday as U.S. banks bought the greenback on bargain-hunting after it hit two-week lows earlier on news that a major U.S. company that finances small businesses filed for bankruptcy protection.
