The South African rand dropped today as the concerns about the sovereign-debt crisis in Europe reminded about itself by dissipating risk appetite among Forex traders.
The unwillingness to risk was felt by higher-yielding currencies such as the rand. European Central Bank President Jean-Claude Trichet said the crisis reached a “systemic dimension” and threaten Europe’s financial system. The rand reversed losses as the European Union and the International Monetary Fund hinted that Greece may receive a next portion of its bailout. Traders also await the vote in Slovakia about the redesigned EU bailout fund.
USD/ZAR jumped from 7.8270 to 7.9820 today before retreating to 7.8740 as of 14:55 GMT.
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