Graphic: renjith krishnan

The rand was softer in early trade on Wednesday on continuing euro woes caused by the crisis in the Spanish banking sector.

At 10:02 the rand was bid at R8.3674 to the dollar from Tuesday’s close of 8.3086. It was bid at R10.4225 to the euro from Tuesday’s close of R10.3710 and at R13.0304 against sterling from R12.9874 at Tuesday’s close.

The Euro was bid at US$1.2457 from Tuesday’s close of $1.2477.

The local market was not moved by local data released this morning by SARB.

Credit extension to the private sector (PSCE) grew by 7.33% year on year (y/y) in April from 9.16% in March, SARB said.

The rate of growth of SA's broad M3 money supply measure rose by 6.16% y/y in April from 6.65% y/y in March.

Absa Capital in their morning report said the rand enjoyed some extended short covering yesterday on the back of a better-than-expected local GDP print, but the local unit is on the back foot again this morning.

“Intensifying concerns surrounding the Spanish banking sector combined with some disappointing US consumer confidence data and growing reports out of China that additional stimulus measures are unlikely have collectively dampened global sentiment and in turn put paid to the extended rand strength,” said Absa.

“The rand is taking its cue from the euro and ignored the local data,” said a local trader.

Dow Jones Newswires reported the euro fell to another multi-year low against the dollar on Wednesday in Asia, with investors expecting the ongoing regional debt problem to send the currency even lower later in the global day.

The common currency fell to $1.2457 on the EBS trading platform, its lowest level since July 2010, due to worries over Spain.

A Wall Street Journal report said the European Central Bank would oppose any attempt to fund Spain's effective nationalisation of Bankia SA via its lending facilities, citing people familiar with the matter. - I-Net Bridge