Rand off R13.28/$ low, but remains at six-month worst level
ETM Analytics market analyst Halen Bothma says the extent of the local currency’s blowout is not justified, but ‘the backdrop in emerging markets is not favourable’
The rand fell to a fresh six-month low against the dollar on Friday, at the end of another bruising week, which included shocking local GDP figures. The rand’s deterioration caught many off guard, especially given that the dollar was trading weaker on global markets. TreasuryOne senior currency dealer Andre Botha tracked the moves to "whispers" in the market about a big deal going through the market, coupled with technical factors such as a trigger in stop loss orders. "With the rand already on the back-foot after the GDP data that was released earlier in the week, momentum was stacked against any rand recovery once the slide began." The rand has lost nearly 4% of its value against the greenback since Thursday afternoon. The weaker currency has a potential to stoke inflation, which is likely to put the Reserve Bank in a tight spot, given the low growth environment. The local economy contracted by 2.2%, much more than expected, in the first quarter, prompting some economists to revis...
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