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Rand down 10% in five days

Aug 08 2008 20:25

Johannesburg - The rand extended losses against the dollar to more than three percent on Friday, as the
greenback staged a strong rally across the board.

The local currency was trading at R7.74/$ at 17:00, 3.5%softer than its previous close in New York, and just off its
weakest mark in a month of R7.7450 hit earlier in the session.

Traders said the move was in line with other currencies, with emerging market peer the Turkish lira also falling sharply.

"It is not just us, you can see the dollar strenth everywhere," Rand Merchant Bank's Jim Bryson said. "The rand is just weakening in line with everything, it is general dollar strength."

The rand has weakened almost 10% to the dollar since hitting a 6-month high of R7.1820 on Monday.

The US unit surged against most major currencies on Friday, on track for its biggest weekly rise in 3-and-a-half years.

South African government bonds lost ground with the rand, with the 2015 yield 15 basis points higher at 9.56 percent for the day and the 2036 yield up by the same margin at 9.025 percent.

The two-year bond yield was 5 basis points up at 10.19 percent.

- Reuters

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Jack
Aug 10 2008 03:38 Report this comment

Yep, well obviously general USD strength overrode all else! It happens. It wasnt only the rand that fell. Of course, why the dollar rose is another story?

steve
Aug 09 2008 17:49 Report this comment

What happened to your carry trade pal??

John
Aug 08 2008 22:42 Report this comment

Just another sensation-driven article. The weekly high actually touched 7.1734, while a movement from the high to the low is closer to 8% than 10%. In the world of money 2 percentage points make a big difs. What goes up, must come down and the strengthening has been taken to extreme levels so a quick pull-back was obvious. Now seriously...

Will
Aug 08 2008 20:25 Report this comment

As an exporter I saw my dollar account loosing money every day since a few weeks back. This was systematically done, same scenario everyday. Are those funny guys, the banks? ReserveBank? Speculators? don't know, most possibly a concoction of all of them in unison to fleece the public. Now we see the Short Squeeze. Luckily I could survive this onslaught and am still in dollars. Come on guys give it another 3% on Monday, give me also a little bit profit...

roguetrader
Aug 08 2008 20:19 Report this comment

At least that way you will go down as a cowboy.

Nasdaq7
Aug 08 2008 19:14 Report this comment

This is actually a sucker's rally. Everyone thinks the commodity cycle has reached its peak, is now over and now they think the US is set for an economic upswing. That is why all the investors are withdrawing funds from the developing world back to US stock markets. But of cause: the truth lies somewhere in between. The US economy is in the doldrums and the commodity cycle still has some way to go.

Benzo
Aug 08 2008 18:55 Report this comment

What a hell of an insight. Wow!!! Really something to go on as a money making directive. Yes indeed, these guys waffle, referring to the past for the future while telling that you cannot actually rely on the outcome. One way of making a living.

Neelsie Naamloos
Aug 08 2008 18:45 Report this comment

Currency movements are one of the most difficult trends to predict - very clever people have been trying to do it for years, and have come up no more successfull than a coin toss. The financial reporter is hampered by the need to have an explanation - something must have been "The Cause" (people don't pay to read dry facts alone). We are always looking backwards, constructing post hoc narratives with causal links, to our own detriment, as it blinds us to the fact that we do not truly understand, and won't ever be able to predict.


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