Volatile rand makes up for losses; gains 1% | Fin24
In partnership with

Volatile rand makes up for losses; gains 1%

May 30 2018 10:48
Jan Cronje

After falling almost 2% against the dollar on Tuesday, the rand gained back some ground in early trade on Wednesday morning, with analysts expecting "jittery" trade.

The local currency was trading 1% stronger against the greenback at 10:20. It opened the sessions at R12.69/$, and was changing hands at R12.56/$ by 10:20. 

"The market remains jittery and volatility can be expected throughout the day," said Bianca Botes, corporate treasury manager at Peregrine Treasury Solutions.

Andre Botha, a dealer at TreasuryONE, said Tuesday's sharp decline in the currency's value was caused by recent political developments in Italy.  

"The impasse in the Italian government had some far-reaching effects, with the euro taking a beating as investors dumped any exposure to Italy and moved into US Treasury Bonds. Global equity markets also sold off, which had a bearing on emerging markets as the market turned decidedly risk-off."

Botha said the developments in Italy would continue to affect the local currency, which coould include for sudden swings. 

The rand is also expected to react to the release of preliminary US GDP figures in the US in the afternoon. 

"Should the number beat expectations we could see the emerging market currencies on the back foot again and the Rand trading near the R12.80 levels post-release."

But should US GDP figures fail to impress the rand could benefit. 

NKC African Economics, in a research note, said it expected te local unit to trade in a range of between R12.50/$ and R12.75/$.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

italy  |  markets  |  currencies  |  rand


Company Snapshot

Money Clinic

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

Voting Booth

Trump’s administration has threatened to choke Huawei, hitting some of its biggest component makers. What are you most concerned about??

Previous results · Suggest a vote