The rand was little changed against major global currencies shortly before midday on Monday‚ as a number of local and international risk events put a dampener on sentiment.
The dollar had regained lost ground against the euro‚ after the collapse of German coalition talks‚ while it firmed against most emerging-market currencies.
The failure of the negotiations represented another big hit for German Chancellor Angela Merkel and the outlook was now “very uncertain”‚ said Barclays Research analysts. It would be up to the president of Germany to decide whether to call another election.
Meanwhile‚ Zimbabwean President Robert Mugabe defied expectations at the weekend and refused to resign‚ although reports on Monday morning suggested that he had agreed to do so.
Local focus is on a Reserve Bank monetary policy decision on Thursday‚ while on Friday‚ ratings agencies S&P Global Ratings and Moody’s will release their latest credit reviews‚ and it is widely expected that further downgrades are on the cards.
“If by some miracle the agencies decide not to downgrade us‚ the level of euphoria will certainly be felt and this could see the rand retrace all the way to its medium-term support level at R13.10/$ over the next few weeks‚” said Standard Bank currency trader Warrick Butler.
At 11.30am the rand was at R14.0088 to the dollar from R14.0028‚ at R16.5254 to the euro from R16.5093 and at R18.5790 to the pound from R18.5108.
The euro was at $1.1796 from $1.1790.
By: Karl Gernetzky -BusinessLIVE
Source: TMG Digital.