The Rand has weakened against the US Dollar as the markets ignored the African nation’s issues and instead focused on the turmoil spilling out of the Eurozone.
The Cyprus bailout caused investors to flock to the safe-haven dollar at the expense of riskier currencies. Today traders said that the recent trend of domestic woes including strikes in the mining sector and the large deficits in the country’s current account and trade deficit should not be regarded as the main cause of the decline seen today.
“It’s important to differentiate between the last week or so when the rand touched R9.29. That was based on dollar strength. This move overnight is purely euro weakness,” said Jim Bryson, chief dealer at Rand Merchant Bank.”Certainly the Rand will not be on the radar in this type of market and dollar/rand should stay in ranges. That only changes if we were to break the R9.29 area.”
At noon in South Africa the currency has seen some support as risk aversion dampened slightly.
“Global risk aversion quietened down a little bit‚ boosting euro/dollar strength‚ which in turn pulled the Rand back from earlier losses‚” said Mike Keenan‚ analyst at Absa Capital.
Despite the slight easing the Rand remains highly volatile. The proposed tax on Cypriot bank depositors is likely to erode confidence across the Eurozone once the details have been finalised and is likely to create popular anger at the decision. Volatility is the name of the game.
Current ZAR Exchange Rates
The South African Rand to Euro exchange rate is currently trading at 0.0839
The South African Rand to US Dollar exchange rate is currently trading at 0.1087
The South African Rand to Pound Sterling exchange rate is currently trading at 0.0718
These exchange rates were correct as of 11:00am GMT
Comments are closed.