Cape Town - The rand pierced through last week's resistance level of R13.41/$ and traded significantly weaker on Wednesday morning as South Africa prepares for President Jacob Zuma's State of the Nation Address (SONA) on Thursday.
RMB currency analyst Isaah Mhlanga said on Wednesday the local unit is set for further weakening.
Trade opened at R13.46/$ on Wednesday from a close of R13.44 and quickly moved to R13.52, amid dollar strength and as reports surfaced that Zuma has deployed the army to reportedly maintain law and order in Parliament.
However, Secretary to Parliament Gengezi Mgidlana told News24 there is no cause for alarm and nothing unusual about the deployment of more than 400 soldiers at the SONA.
By 11:29 the rand was trading at R13.47/$, R14.35/€ and R16.85/£.
"On the data front, this week has been rather empty, leaving politics to drive markets," Mhlanga said.
Andre Botha, dealer at TreasuryOne, noted that pre-SONA nervousness is the main reason for the rand's weakness. "The rand could trade erratically before and during the address should outside influences disrupt the address," he said.
Referring to rising political concerns in South Africa and Europe, Botha said "in this political minefield, commodities have been the biggest winners with gold back above $1 230/oz, a clear indication that markets are a bit wary of all the political sparring in the world".
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