The rand declined for the first time in four days, retreating from a three-month high, as stocks and commodity prices fell before European Union leaders meet in Brussels to discuss the region’s debt crisis.
South Africa’s currency slid as much as 1.5 percent and traded 1.4 percent weaker at 7.8665 as of 4:12 p.m. in Johannesburg, the worst performance out of 16 major currencies monitored by Bloomberg. The rand advanced 2.5 percent last week, reaching 7.7435, its strongest since Oct. 30.
A measure of commodity prices retreated for the first time in four days and emerging-market stocks fell as EU leaders are putting the finishing touches on a German-led deficit-control treaty and endorse a 500 billion-euro ($661 billion) rescue fund to be set up this year. Greece and its private creditors said Jan. 28 they expect to complete a deal in coming days after bondholders signaled they would accept a bigger cut in their debt holdings.
“Most of the focus will remain on the EU summit and any indications of a possible setback in the Greek talks,” Nomvuyo Guma, a currency strategist at Standard Bank Group Ltd. in Johannesburg, said in e-mailed comments. “Markets once again seem nervous.”
South Africa’s benchmark stock index slipped for a second day, led by commodity producers including Anglo American Plc. Raw materials account for 60 percent of the nation’s exports.
Euro-area confidence in the economic outlook improved less than forecast in January as the region’s leaders struggled to revive growth and bring an end to a fiscal crisis now in its third year.
An index of executive and consumer sentiment in the 17-nation euro area rose to 93.4 from a revised 92.8 in December, the European Commission in Brussels said today. That’s less than the median prediction of 93.8 in a Bloomberg survey of 30 economists.
South Africa’s 6.75 percent bonds due 2021 declined for the first time in three days, driving the yield up two basis points, or 0.02 percentage point, to 7.73 percent.