Rand breaches R15/$ in volatile trade | Fin24
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Rand breaches R15/$ in volatile trade

Aug 17 2018 11:32
Jan Cronje

The rand remained volatile on Friday morning, first strengthening by 0.75% before weakening by 1.7% to briefly trade under R15/$.  

The local currency, which has been experiencing large swings in recent days on the back of broad emerging market weakness and local economic concerns, opened at R14.73/$ and strengthened to R14.62/$ before falling back to change hands at R14.80/$ at 10:54.

In then quickly lost 20c to the dollar to fall under R15/$ before pulling back to trade at R14.94 at 11:29.

TreasuryOne said in a snap note that the rand's fall was caused by a 'blowout' in SA's fellow emerging market currency the Turkish lira, which fell over 5% on Friday morning against the dollar. 

Andre Botha, senior currency Dealer at TreasuryONE, earlier said in a morning note that the rand was still taking its cue from emerging market sentiment. 

"The movement in the rand only showcases the current risk-averse nature in the market regarding EMs. At the slightest hint of discord, we have seen massive sell-offs in the emerging markets."

While Botha said the rand was "massively undervalued" – and should in time start to strengthen – "the theme until we reach some sort of sanity in the market will be volatility".

"A run to R15.00 cannot be ignored in the short term."

Adam Phillips, treasury specialist at Umkhulu Consulting, said in a morning update that the rand exchange rate would next week likely be as volatile as this week. 

*Update: This article was updated at 11:31 and at 12.34 with the latest rand/dollar exchange rates and snap comment from market analysts. 

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turkey  |  lira  |  dollar  |  markets  |  money  |  rand


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