Rand trips again amid twitchy global markets

Later in the week, markets will digest the minutes of the US Federal Reserve’s most recent meeting, to get a sense of how the policy markets view the outlook on rates in the context of the fears about a trade war.

To date, the US Fed has been confident about the US economic outlook after raising interest rates by cumulative 50 basis points since the start of 2018.

Higher US rates have previously strengthened the dollar at expense of the rand and other emerging-market currencies via bond outflows in particular.

In the past, SA and other emerging markets have benefited from the era of a low interest-rate environment in developed markets.

“The rand has been the worst performer relative to emerging-market peers over the month, losing 7% against the US Dollar,” Nedbank Corporate and Investment Banking analysts said in an e-mailed note to clients.

The bank’s analysts tracked the weaker rand to disappointing current-account deficit data, uncertainty surrounding the mining charter and land expropriation without compensation.

At 10.05am, the rand was at R13.7984 to the dollar from R13.7136. It was at R16.0624 to the euro from R16.0270, and R18.1716 to the pound from R18.1023.

The euro was at $1.1640 from $1.1685.