Dec. 12 (Bloomberg) -- The rand weakened against the dollar after concern that Europe’s debt crisis will persist curbed demand for commodities and riskier emerging-market assets.
South Africa’s currency depreciated as much as 2 percent and traded 1.7 percent weaker at 8.2355 per dollar as of 4:12 p.m. in Johannesburg, extending last week’s 0.7 percent retreat. It fell 0.6 percent against the euro to 10.9067.
The accord European Union leaders agreed to last week at a summit in Brussels provides tighter budget deficit rules and an additional 200 billion euros ($267 billion) in bilateral loans to the International Monetary Fund to assist the euro area bailout. The summit offered few new measures and doesn’t diminish the risk of credit-ranking revisions, Moody’s Investors Service said in its Weekly Credit Outlook today.
“We are yet to see a tangible recovery in global risk appetite, and the recent EU summit on the debt crisis did not offer any cause for relief,” Benoit Anne, the London-based head of emerging-market strategy at Societe Generale SA, and colleagues said in an e-mail. “It is way too early to turn bullish on global emerging markets, especially in the high-beta EM currency space.”
Copper declined on speculation that a slowdown in China’s industrial output will increase stockpiles in the biggest consumer and concern that Europe’s debt crisis will persist even after leaders agreed to a fiscal accord.
Copper for delivery in three months fell as much as 2.5 percent to $7,617.25 a metric ton, adding to last week’s 1 percent decline.
Commodities make up 50 percent to 60 percent of South Africa’s total exports, according to Rand Merchant Bank.
South Africa’s 13.5 percent bonds due 2015 retreated for a sixth day, driving the yield up 7.2 basis points, or 0.072 percentage point, to 6.855 percent.
--Editors: Peter Branton, Alex Nicholson
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