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Rand plunges by over 2% in early trade

Aug 30 2018 10:56
Fin24

The rand fell by almost 2% against the dollar by 10:45 on Wednesday. 

The local currency opened the day at R14.35/$, and was trading at R14.63 to the greenback by 10:45. It had already lost 1% during trade on Wednesday. 

By 12:56 it had strengthened slightly to trade at R14.60/$, down 1.72%. 

Andre Botha of TreasuryONE said in a noon note that the rand was still being impacted by Turkish economic struggles. As a fellow emerging market member, rand was "guilty by association" with the Turkish lira. 

"It appears that the Turkey sell-off is still in full swing and South Africa [is] bearing the brunt of being lumped into the same basket." 

Bianca Botes, a Corporate Treasury Manager at Peregrine Treasury Solutions, said in an earlier morning note that the currency was in for a bumpy ride. 

"The rand has struggled to hold onto its gains from earlier this week as land reform still haunts local and foreign investors alike," she said. 

Analysts will be looking at the release of SA's Producer Price Index figures, and US jobless data later in the day, she said.  

The dollar spot index - its value relative to a basket of six foreign currencies - was at 94.68 at 10:46, even on the day. 

In a media statement on Thursday morning, the AA said that the price of petrol is expected to increase by between 23 cents and 25c a litre next month, and diesel by 28 cents, mainly due to the weak rand. 

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rand  |  markets  |  currencies
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