Bloomberg News

Rand Advances for First Time in Four Days on Plan to Help Euro

January 09, 2012

Jan. 9 (Bloomberg) -- The rand advanced for the first time in four days, following gains in the euro as the leaders of Germany and Franc pledged to accelerate a plan to rescue the 17- nation currency.

South Africa’s currency appreciated 0.1 percent at 8.168 as of 5:39 p.m. in Johannesburg, after declining 0.3 percent. It retreated 0.1 percent against the euro to 10.4061.

The euro, the currency of 30 percent of South Africa’s trade, gained against the majority of its most-traded peers after German Chancellor Angela Merkel and French President Nicolas Sarkozy said they may complete their new budget rule book one month ahead of schedule and speed capital contributions to the bailout fund being set up to stem the debt crisis.

“Markets are likely to take their cue from these developments,” with the rand likely to react to “changes in risk sentiment,” Nomvuyo Guma, a Johannesburg-based currency strategist at Standard Bank Group Ltd., wrote in e-mail comments.

South Africa’s 8.25 percent bonds due 2017 increased for a second day, driving the yield down two basis points, or 0.02 percentage point, to 7.53 percent.

--Editors: Stephen Kirkland, Peter Branton

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

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


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