Bloomberg News

Rand Gains First Day in Five Before Europe Debt Crisis Meetings

October 21, 2011

Oct. 21 (Bloomberg) -- The rand rose against the dollar, snapping four days of losses and paring its first weekly decline in four, as European leaders prepared for two summits in five days to resolve the region’s debt crisis. Bonds rose.

South Africa’s currency strengthened 1.3 percent to 8.1069 per dollar as of 4:12 p.m. in Johannesburg, trimming its drop this week to 3.3 percent. Against the euro, it gained 0.3 percent to 11.2286.

Stocks advanced, commodity prices rallied and the dollar slumped against most of the more than 20 emerging-market currencies monitored by Bloomberg as investor appetite for riskier assets improved. European finance ministers are meeting today, starting a six-day negotiation over how to save Greece from default, shield banks from the fallout and build more powerful defenses against the debt crisis.

“The danger in persisting with a long-dollar strategy heading into a weekend where both an emergency finance ministers’ meeting and European Union Summit are taking place is high,” Tradition Analytics strategists led by Quinten Bertenshaw said in e-mailed comments. Tradition advised clients to sell dollars and hold neutral currency positions over the weekend.

South Africa’s 6.75 percent securities gained for a third day, driving the yield down three basis points, or 0.03 percentage point, to 8.061 percent.

--Editors: Ana Monteiro, Linda Shen

To contact the reporter on this story: Robert Brand in Cape Town at rbrand9@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


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