Attract A South African

The South African rand fell today for the first time after three sessions of gains on concerns that the economic slowdown in China will diminish demand for commodities, reducing attractiveness of South Africa’s commodity-linked currency. China was showing signs that its economic growth is moderating for some time now. It’s bad for commodities and for South Africa’s currency as the South African economy depends on exports of raw materials and China is important trading partner. Nevertheless, the economy in the SA itself looks robust enough to support the rand. In fact, some economists even speculate that the nation’s central bank may raise interest rates in the near future. USD/ZAR climbed from 7.5270 to 7.6240 as of 14:22 GMT today, erasing losses of the previous two days.

(Reuters) - Gold was steady on Wednesday, fairly close to recent 11 week highs and taking a cue from the euro's march to a two month peak as investors bet that Greece would finally secure a second bailout needed to avoid default. Receding risk aversion - reflected in rising share prices - is seen as a dampening factor for gold's safe-haven credentials, with German government bonds feeling some pressure. But wider uncertainty on the euro zone's economic outlook was more supportive for gold, with Germany seeing the steepest drop in exports for nearly three years in December and the Bank of France saying its economy would not grow at all in the first quarter of 2012. Simon Weeks, head of precious metals at Scotiamocatta, said bullion seemed to be caught in an identity crisis between acting ...

(Reuters) - Gold held steady on Wednesday, fairly close to recent 11 week highs and taking a cue from the euro's run to a two month peak as investors bet that Greece would finally secure a second bailout needed to avoid default. Receding risk aversion - reflected in rising share prices - is seen as a dampening factor for gold's safe-haven credentials, with German government bonds feeling some pressure. But wider uncertainty on the euro zone's economic outlook was more supportive for gold, with Germany seeing the steepest drop in exports for nearly three years in December and the Bank of France saying its economy would not grow at all in the first quarter of 2012. Simon Weeks, head of precious metals at Scotiamocatta, said bullion seemed to be caught in an identity crisis. "It seems ...

The South African rand kept its gains today after the South African Reserve Bank left its main interest rate unchanged at yesterday’s monetary policy meeting to support recovery of the nation’s economy. South Africa’s central bank maintained its key repurchase rate unchanged at 5.5 percent, a move expected by market analysts. The main lending rate is at 30-year low. Gill Marcus, Bank’s Governor, said that the current monetary policy “is accommodative and supportive of the real economy”. Positive developments in the global economy reduced need for an interest rate cut, but investors think that an interest rate hike also isn’t likely to happen in the near future. High lending rates help to attract to South Africa investors interested in so-called carry trades. Such investors borrow in ...

Oil futures rose on Monday on growing tension between Saudi Arabia and Iran, after the Islamic state told its Gulf Arab neighbours not to make up any shortfall caused by an embargo on its crude oil exports. Saudi Arabia, the world's top exporter, said on Monday that could lift its production the United States pressures nations to stop importing oil from the Islamic Republic. "Iran is the main topic still by some 2 million barrels per day 'almost immediately'. Brent crude futures rose 76 cents to close at $111.20 a barrel, after touching an intra-day high of $111.67. U.S. crude rose 99 cents to $99.69 a barrel, with trading activity very light due to a U.S. public holiday. The latest move from Iran comes as top Asian buyers of Iranian oil -- China, Japan and South Korea -- tour ...

Oil futures rose on Monday on growing tension between Saudi Arabia and Iran, after the Islamic state told its Gulf Arab neighbors not to make up any shortfall caused by an embargo on its crude oil exports. Saudi Arabia, the world's top exporter, said on Monday that could lift its production by some 2 million barrels per day 'almost immediately'. Brent crude futures traded 80 cents higher at $111.22 a barrel at 1538 GMT, after touching an intra-day high of $111.67. U.S. crude rose 65 cents to $99.35 a barrel, having traded as high as $99.80 earlier in the session. The latest move from Iran comes as top Asian buyers of Iranian oil -- China, Japan and South Korea -- tour alternative Middle East suppliers while the United States pressures nations to stop importing oil from the Islamic ...

The South African rand was down today as Fitch Ratings changed outlook for South Africa’s sovereign credit rating to negative, reducing attractiveness of country’s assets to investors. South Africa’s BBB+ rating is in danger as Fitch hinted that a rating cut may occur. The rating agency explained the change of the outlook by inability of the government to improve employment and the resulting pressure on public finances. Fitch said that negative outlook “reflects the limited progress on several long-standing structural issues”. Analysts were somewhat surprised by the market reaction as usually changes to outlook haven’t such a big impact as changes to ratings themselves. USD/ZAR was up from 8.0240 to 8.1280 as of 18:05 GMT today and touched the daily maximum of 8.2010 earlier.

(Reuters) - China's $410 billion sovereign wealth fund China Investment Corp. is set to receive additional funding of up to $50 billion, two sources said, a step that could help it move quickly to buy overseas assets, especially in Europe. The new funding comes along with an agreement between relevant Chinese government agencies to give CIC CIC.UL new money to manage every year, the sources who had knowledge of the matter told Reuters on Friday. The sources asked not to be identified due to the sensitivity surrounding China's management of its foreign reserves. The agreement would lay out a long-term framework under which CIC would be allocated money to manage from China's foreign exchange reserves and would also chart the future of its domestic investment arm, Central Huijin Investment, ...

The South African rand rebounded today after yesterday’s decline on the speculation the central bank will keep its interest rates unchanged, continuing to draw foreign investors. South Africa’s interest rates are important for the rand as the differential between the South African rates and the borrowing costs in the developed markets attract investors interested in carry trades. The main interest rate of South Africa is at 5.5 percent, compared to 0.25 percent in the USA, 1.25 percent in the European Union and 0.1 percent in Japan. The South African Reserve Bank left the benchmark repo rate unchanged on November 10 for the sixth consecutive month. Analysts consider probability on an interest rate cut as low. Economists expect that the government report will show tomorrow that the ...