Rand Heads to Weekly Drop on European Problems

The South African rand dropped today, heading to the worst week in more than two months, as the European debt crisis continues to produce a downward pressure on the riskier currencies.

The market sentiment worsened after German Chancellor Angela Merkel rejected the idea of joint euro-bonds. Germany’s leader reasoned that the idea was a too easy way for exiting the crisis that can hurt the fiscal discipline of the peripheral European economies and lead to even bigger problems. Fitch Ratings reduced Portugal’s credit rating to junk yesterday, while Moody’s Investor Service downgraded Hungary’s rating to the same non-investment grade.

USD/ZAR went up from 8.4530 to 8.5440 today as of 12:40 GMT and touched the high of 8.5790 earlier.

If you have any questions, comments or opinions regarding the South African Rand,
feel free to post them using the commentary form below.