Rand continues puzzling decline | Fin24
  • Credit Rating

    Moody's has (again) said that weak state-owned entities are a risk to SA's sovereign credit rating.

  • SARS Inquiry

    Judge Nugent has recommended the president sack suspended SARS boss Tom Moyane.

  • Nene Rand Rollercoaster

    Simon Brown says savvy investors worked out how the rand would react to uncertainty at Treasury.


Rand continues puzzling decline

Sep 30 2016 08:45

Cape Town – The rand continued its “puzzling” decline against the dollar, trading 0.24% lower at R13.90 by 08:30 on Friday.

“Some rand weakness is justified given the (Deutsche Bank-inspired) global-risk-off environment, but the extent of losses remains puzzling considering ABI (AB InBev) inflows should be continuing,” RMB analyst John Cairns said on Friday, adding that “losses remain difficult to explain”.

Umkhulu Consulting analyst Adam Phillips concurred, saying “this week has been very confusing”.

“It now transpires that there was a great deal of 'front running' by offshore players on the inflows from AB Bev,” he said on Friday.

Cairns said that “taking a strong rand view is very difficult when one does not fully understand what is going on”.

“Still, given the underlying size of the ABI (AB InBev) flows, we are reluctant to give up on our call for rand gains to resume,” he said.

“Clearly, however, two days of aggressive rand losses imply there is scope for further USD/ZAR upside. As such, for now, the view is for sharp moves in either direction.”

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest. 24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

equities  |  rand  |  markets  |  currencies


Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

The appointment of Tito Mboweni will:

Previous results · Suggest a vote