Zimpapers Logo

workers may dent economic growth and as Europe’s debt crisis sapped demand for riskier assets.
The rand weakened as much as 1,7 percent to 7,0035 per dollar, and traded down 1,6 percent at 6,9978 in Johannesburg, the lowest level since May 26.
It slipped 0,8 percent to 9,8236 per euro. In earlier trade the rand was facing resistance at 6,9978 it fell to 7,0035 per dollar.

In South Africa, the Solidarity labor union joined a week-long oil industry strike that has caused fuel shortages.
The rand is weakening more than its emerging-market peers, which we view as a function of the escalating industrial action in South Africa.
That puts the dollar as favoured over the euro, and high-yielding commodity currencies on the back foot.

In the eurozone the classical Swiss continued its rally against the single currency the euro breaking new levels and was trading at 1,1539 per euro.
With the current situation in the markets where margins are thin and volatility is the order of the day, the Swiss will have a problem in the long run where they will attract hot money.

The Swiss franc will remain stronger as long as the European crisis persists. The euro reversed earlier gains and was trading at 1,4112 per dollar from 1,4157 against the dollar.
Everyone seems to be concerned about growth of which global growth is slowing from the US to Asia and in this environment investors will look for balance sheets that are clean and appealing of which Switzerland is offering that.

There’s broad-based demand for the Swiss franc that’s unlikely to diminish unless risk aversion significantly eases.
In the UK weak data continues to weigh on the pound and British economy as housing prices declined.

The pound declined 0,3 percent to US$1,6089, but gained ground against the euro as it traded at 0,8725.
The Australian and New Zealand dollars dropped on speculation European leaders will fail to agree on measures to resolve the region’s debt crisis at a summit this week, curbing appetite for higher-yielding assets.

The Reserve Bank of Australian has hinted it’s mostly likely to cut interest rates in the next 12 months.
The New Zealand dollar declined against the dollar and the yen. Both the New Zealand dollar and Aussie are really falling in sympathy with what’s happening in the euro.
The Aussie fell to US$1,0573 to the US dollar from US$1,0653 and was trading at 83,64 yen.

The kiwi as it is known fell 84,34 to the US dollar and 66,73 to the yen in earlier trade. When we look at the bigger picture the European crisis will not go anywhere anytime soon.
The market has been selling the euro for some time now and will continue to do so as flight to safety heightens.

Gold rose to a record US$1 607,90 an ounce, capping the longest rally in decades, as debt concerns in Europe and the US boosted demand for the metal as a haven.
“There is just a lack of confidence in governments and currencies, everyone is exiting positions into Swiss franc and gold.
If the US and the Europeans can’t fix their houses we will continue to see a gold rally.

Crude oil fell, as investors fear that a debt contagion will cause a global slowdown and would hamper demand for oil.
Crude oil fell to US$95,93 per barrel, falling by a US$1,31 from US$97,24.

• Contact Prodigy Chinanga on 077 2 753 594