Rand rallies to end 7-day losing streak | Fin24
  • SA Revenue Service

    The tax agency says a unit that tackles illicit financial flows has recovered R2.6bn since April 2019.

  • Eskom

    The power utility has brought back a former manager to head up its Kusile construction.

  • Zimbabwe

    The country has turned to UAE in hopes of selling a stake in its national oil company.


Rand rallies to end 7-day losing streak

Jan 12 2016 13:58
Xola Potelwa

Johannesburg - The rand rebounded from seven days of declines on Tuesday, rising the most among major and emerging-market currencies, as technical indicators suggested to some traders that the currency’s fall to a record this week was overdone.

The currency gained 0.8% to R16.6407 per dollar by 12:38 in Johannesburg on Tuesday, reversing an earlier decline of as much as 1%. That trimmed losses this year to 7%, the biggest retreat among the 31 emerging-market and major currencies tracked by Bloomberg.

“Liquidity conditions are quite thin,” Ricardo da Camara, a market analyst at ETM Analytics, said by phone from Johannesburg. “Looking at technical indicators it has been pushed quite far, but it’s not to say it can’t do that again.”

The rand’s relative strength index was above the 70 level for a fifth day on Tuesday, suggesting to some traders the currency is oversold and poised for a rebound.

The rand plummeted as much as 9% on Monday, the most in more than seven years, in Asian trading amid reduced demand for emerging- market assets. Such flash crashes will probably become more common in foreign-exchange trading as liquidity shrinks amid tighter regulation and reduced demand for emerging-market assets, according to Insight Investment Management and Citigroup.

The currency’s gains on Tuesday could be attributed to “profit taking in a very thin market,” Jim Bryson, a currency trader at Rand Merchant Bank in Johannesburg, said by phone. “It will remain thin until a bit more certainty returns to the market.”

Volatility in the rand versus the dollar surged toward the highest level in four years, while a measure of global currency price swings climbed to the most since October.

The difference between prices at which traders are willing to buy and sell the rand, used as a gauge of liquidity, was about 1.5 times wider on average in the past six months than it was during the first half of 2015, according to data compiled by Bloomberg.

rand  |  currency  |  markets


Company Snapshot

Voting Booth

How concerned are you about ransomware attacks?

Previous results · Suggest a vote