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Forex traders saw the rand set for its worst week in two months today (November 25th) as concern about the eurozone's sovereign debt crisis mounted.
The South African currency dropped 1.4 per cent and was at 8.5849 to the dollar this afternoon in Johannesberg, reports Bloomberg. Against the euro it fell 0.41 per cent to €11.3659.
Nomvuyo Guma, a Johannesburg-based currency strategist at Standard Bank Group and colleagues, told the news provider in an email that the rand seemed likely to continue its downward trajectory for the time being.
"Worries over Europe are likely to resurface as the region's leaders are seemingly no closer to common ground," they said.
There are widespread concerns about the financial situation in Europe, as Italian borrowing costs soared to their highest point in 14 years today and German chancellor Angela Merkel refused to countenance an expanded role for the European Central Bank in dealing with the crisis.
Reuters warned yesterday that Germany's status as a "paymaster" in the euro region means it could be negatively affected.
Posted by Greg Secker
