European Crisis Isn’t Good for Rand

The South African rand is just another higher-yielding currency that suffers from the adverse impact of the European-sovereign debt crisis on currency markets.

The rand suffers not only from the direct effect of the risk aversion on riskier currencies, but also from the decline of the euro. As much as 45 percent of the South African exports are based on the euro, meaning the problems of Europe had additional negative impact of South Africa’s economy and currency, besides general pessimistic outlook on global markets. The South African benchmark stock index sank more than 2 percent.

USD/ZAR jumped from 7.2680 to 7.3290 today as of 11:08 GMT.

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