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.
Risk Disclosure
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.