Picture: REUTERS
Picture: REUTERS

The rand was hovering at six-week lows on Tuesday morning and on track to extend its losing streak to four consecutive sessions, amid worries about SA decaying fiscal backdrop.

The rand, which is down 2.2% over the past 30 days, weakened further after the International Monetary Fund slashed SA's growth forecast on Monday, citing structural constraints and deteriorating public finances. The local currency is the worst performing among emerging-market currencies tracked by Bloomberg over the past 30 days, followed by the Brazilian Real at 2.14%. 

“The rand has underperformed other risky assets during this period but that ties into cyclical demand and the dire fundamental position of the country. In reality much of this year’s demand has emanated from offshore investors who appear to be pre-hedging in anticipation of the February budget/Moody’s [announcement],” Standard Bank currency dealer Warrick Butler said.

At 10.40am, the rand had weakened 0.48% to R14.571/$ after reaching a six-week low of R14.59 in intraday trade. It had softened 0.42% to R16.1581/€ and 0.48% to R18.9598/£. The euro was flat $1.109.

The R2030 government bond was weaker with yield rising one  basis point to 8.99%. Bond yields move inversely to their prices.

Gold was down 0.13% to $1,558.68/oz and 1.21% to $1,010.8. Brent crude lost 0.77% to $64.62 a barrel.  

mjoo@businesslive.co.za

Business Day TV caught up with RMB's Global Markets Strategist John Cairns for his views on the rand.