The vulnerable Rand continues

The vulnerable Rand continues the fight

Last week we saw the vulnerable Rand under pressure against the Dollar and the Pound. As China is a key importer of local commodities in South Africa, the release of weak manufacturing data out of China put the Rand under pressure on Monday.

The vulnerable Rand continues

The Rand continued its ongoing struggle against the Dollar this year. The ZAR has been one of the most affected emerging market currencies in anticipation of US interest rates rising later this year.

On Wednesday, the Rand tumbled to its weakest level against the Pound in 13 years and was trading at GBP/ZAR: 20.00. It dropped to R12.8282 to the Dollar, which was the lowest since December 2001. According to the London Capital Group, the Rand could weaken to R13 to the Dollar before the end of the year, depending on the outcome of the Federal Reserve’s decision regarding an interest rate hike.

What to look out for this week? With a volatile currency such as the Rand, it is hard to predict which way it could move each week. It will be essential to keep an eye on the Rand towards the end of this week when data will be released from the US and the Eurozone that will likely affect the movement of the emerging currencies.

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