The South African Rand has begun the week on the back foot as it weakened against the Pound, US Dollar and other major peers over the weekend.
The cause for the Rands weakness was that investors are looking ahead to events later in the week which include the US Federal Reserve’s latest policy meeting and the publication of domestic inflation data. This week will also be shorter than normal due to the South African markets being closed on Friday for a national holiday.
Events elsewhere are also impacting the Rand. The referendum vote which took place over the weekend in the Crimea heightened demand for safe haven assets. According to reports up to 97% of voters favoured that the disputed region leaves Ukraine and becomes a part of Russia. All eyes are now on the US and EU to see what sanctions they will impose on Russia.
“Ahead of the release of local data this week the focus will be on the outcome of the weekend’s Crimea referendum and potential economic sanctions from the EU/US against Russia,” said an emerging market analyst at 4Cast.
Tensions in the region weren’t helped after Russian state media made a startling reminder that Russia had the power to turn the USA to ‘radioactive ash’. With no end to the standoff in sight the markets are likely to remain jittery for the next few weeks.
Also weighing upon the Rand is the ongoing strike in the nations platinum mining sector which has dragged on for an eighth consecutive week.
The Rand is likely to experience volatility on Wednesday when the South African and US data is released.
South African Rand (ZAR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,South African Rand,17.7840 ,
Euro,,South African Rand,14.8459,
US Dollar,,South African Rand,10.6875 ,
Australian Dollar,,South African Rand,9.6314 ,
[/table]
Comments are closed.