Futures Market News
Rand climbs as Draghi idea gains momentum
Aug 07, 2012 01:04 PM
The value of the monetary unit of the African continent's largest economy pushed to its top level in more than four weeks against the U.S. dollar on Tuesday after Germany endorsed ideas of the chief of the central bank of Europe to challenge the sovereign debt crisis, according to Bloomberg.
The South African rand touched its top value since July 5 after President Mario Draghi with the European Central Bank proposed the institution he leads would purchase the debt of euro-bloc nations struggling under the duress of the sovereign debt scourge.
"The euro has enjoyed some support as have risk assets in all forms," states an email authored by analyst Quinten Bertenshaw with ETM Analytics to Bloomberg. "All indications are that the bullish sentiment on risk markets including equities and emerging-market assets could persist for a little longer. This will be seen as good news for an economy like South Africa."
Chancellor Angela Merkel of Germany said the nation she leads is not concerned about Draghi's suggestion.
The performance of the rand very often is similar to that of the common currency of the European Union since the 17-nation bloc is the top trading partner to South Africa, according to Reuters.
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