Uncertainty in debt-riddled Greece dragged down the South African rand to its lowest value in nearly four months on Friday as the monetary unit drove toward its poorest weekly showing thus far in 2012, Bloomberg reports.
The monetary unit of the largest economy of the African continent fell as the Aegean nation continues to avoid defaulting on loan obligations. Following last weekend's election that left no clear victor, Greece also is in peril of removal from the euro currency bloc. Whether the country will adhere to austerity measure commitments also is unclear and causing panic.
"The prevailing uncertainty will continue to weigh on the euro and other risky assets, while continuing to lend support to the dollar. Therefore, the rand's weakening bias will persist into the weekend," according to an email to Bloomberg by currency strategist Nomvuyo Guma with Standard Bank Group in Johannesburg.
The nations of the euro zone purchase more than 20 percent of exports from South Africa, making the African nation sensitive to regional developments and challenges.
For the second consecutive week on Friday, South Africa did not encounter strong results during an inflation-linked bond sale, according to Reuters.
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.