THE rand was trading at record lows on Monday morning with few developments expected to support the beleaguered local currency over the short-term.
The rand crossed its all-time low of R13.85/$ on Friday after US non-farm data supported US interest rate hikes this year. The previous all-time low was recorded in December 2001.
It also weakened above the R21/£ level for the first time.
Trading was less volatile on Monday due to a public holiday‚ Labour Day‚ in the US.
At 8.56am‚ the rand was at R13.9435 from Friday’s close of R13.8642. The rand was at R15.5387 against the euro from R15.4782 and was at R21.1795 against the British pound from Friday’s close of R21.0486.
The euro was $1.1144 from $1.1163.
The rand is being hammered from all sides‚ ranging from low commodity prices and tanking Chinese growth to probable higher US rates and a sluggish local economy. Analysts expect the local currency to weaken past R14/$ soon as there are a lack of factors which could support the local currency.
Barclays Research said in a note softer commodity prices‚ combined with a stronger dollar environment‚ were once again the catalysts for rand weakness.
Although Friday’s headline non-farm payroll number was softer than expected‚ the fact that there were upward revisions to the previous month’s reading‚ and given that the unemployment rate dropped‚ proved sufficient to inspire dollar bulls.
“We expect the rand to continue taking direction primarily from offshore developments this week‚ with Wednesday’s China trade and inflation likely to be of particular interest‚” Barclays said. – BDlive
Source: RDM News Wire.
Comparing the Rand to the Chinese Yuan also demonstrates a failing currency – in 2011 the Yuan and Rand had price parity; one Yuan bought one rand. Today 0.46 Yuan will buy one rand.
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