Rand's dive leaves traders stunned as Brazilian scandal rocks markets
'It was the extent and speed of the rand’s losses that was surprising, especially in an environment of dollar weakness'
The sharp drop in the rand on Thursday left many forex traders stunned as they watched on their screens how the rand in a matter of hours tumbled nearly 3% against the dollar. "It was the extent and speed of the rand’s losses that was surprising, especially as it was in an environment of dollar weakness," said Iquad Treasury portfolio manager Tony van Dyk. The rand lost about 40c against the dollar on the day on news that a huge scandal had hit Brazil, with reports saying that Brazilian President Michel Temer had tried to bribe officials involved in the 2016 impeachment of former president Dilma Rousseff. The allegations, based on apparent secret recordings, sent Brazil’s real currency down 7% and the Bovespa stock index 10% lower. The rand lost more than 3% against the pound before recovering as the pound firmed to more than $1.30 on the day, the best since the Brexit vote. In late afternoon trade the rand settled at about R13.50/$, still 2.24% weaker from the morning’s opening tra...
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