Rand weaker despite German ruling

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The rand was trading softer at noon on Wednesday on the back of weaker than expected current account deficit numbers on Tuesday and after the German court ruling on the bailout fund in Europe had no major effect on the local currency.

“The rand is weaker after yesterday’s current account figures‚ which were worse than expected. The German court’s positive ruling this morning has not benefited the rand‚ a local trader said. The current account deficit widened to 6.4% of gross domestic product in the second quarter from a 4.9% deficit in the first quarter.

At 12.06pm‚ the rand was bid at R8.1992 to the dollar from R8.1711 at Tuesday’s close. It was bid at R10.5891 to the euro from its previous close of R10.5111 and at R13.2107 against sterling from R13.1373 before.

The euro was bid at US$1.2921 from $1.2856 at Tuesday’s close.

The constitutional court ruling in Germany is risk-positive‚ Rabobank said‚ given that the conditions set by the court were not as severe as some participants had anticipated‚ Dow Jones Newswires reported.

The court said the lower house of parliament must approve an increase in German liabilities to the European Stability Mechanism (ESM) in excess of EUR190 billion and both houses of parliament must be informed of any ESM decisions. - I-Net Bridge

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