Rand weakens as euro slips on poor eurozone data
The rand was weaker against major global currencies on Friday afternoon, giving up much of the gains from Thursday when the Reserve Bank raised interest rates 25 basis points.
The euro, which the rand usually tracks, was under pressure after a flash eurozone purchasing managers’ index for November fell to a four-year low. Euro weakness was prompted by concerns this could affect the European Central Bank’s (ECB’s) monetary policy outlook, reported Dow Jones Newswires.
The rand’s reaction to the rate rise has been somewhat muted, but analysts have said the move likely presages improved stability in the local currency in the long term.
The dollar was slightly firmer on Friday afternoon, with the euro weakening in turn. Trade has been subdued by the US Thanksgiving Day holiday on Thursday, while all eyes are on a Brexit summit on Sunday.
UK Prime Minister Theresa May is meeting EU officials in a bid to iron out final differences in a draft Brexit deal, including Spanish concerns over Gibraltar, as well as issues of fishing rights.
May will still need to take any deal to the UK Parliament in December.
At 2.10pm the rand was 0.82% weaker against the dollar at R13.8722, 0.29% weaker against the euro at R15.7456 and 0.48% down against the pound at R17.8005. The euro was 0.47% weaker at $1.1351.
Source: businesslive.co.za