Rand slides to 7-week low over Eurozone

Bloc consumes 22% of South Africa's exports. Johannesburg The rand fell for a third day Thursday, reaching its weakest in seven weeks, as South African stocks slid after Spain sold less debt than targeted at an auction, renewing concern Europe's debt crisis will worsen. The currency retreated as much as 0.4 per cent and traded 0.3 per cent weaker at 7.8584 per dollar in Johannesburg, extending this week's loss to 2.4 per cent. Yields on South Africa's 8.25 per cent bonds due 2017 rose three basis points to 7.427 per cent, the highest in two weeks. Spain struggled to borrow in financial markets, selling €2.6 billion (Dh12.74 billion) of bonds at an auction yesterday, an amount that was near the bottom of a range set by the Treasury for the sale. France sold €8.439 billion in bonds, at the top end of its target, with borrowing costs rising for much of the debt sold. "The outlook for the Eurozone no longer looks as stable or convincing," George Glynos, an economist at Johannesburg-based ETM Analytics, wrote in emailed comments. "A riskier investment climate cannot be ignored and will have an influence on the pricing of risk assets. In the short term this of course raises the prospect of a weaker performance on the rand which will struggle to buck the trend." The euro-region accounts for 22 per cent of South Africa's exports. Slower economic growth and worsening debt issues have implications for South Africa's trade and current accounts, Ian Cruickshanks, head of treasury strategic research at Johannesburg-based Nedbank Group Ltd., said by phone. Rand traders might also be closing their positions due to a shortened week, Cruickshanks said. South Africa's markets are closed today and on Monday for Easter. "You don't want an open position ahead of four days of the market being closed here in South Africa," he said. Johannesburg's FTSE/JSE Africa All Share Index fell 0.3 per cent, extending yesterday's 2.3 per cent decline, the biggest since October 4. From: Gulfnews