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Rand hits R15.17 to dollar – worst level since March

Weakens below key level in early morning trade on Thursday.
Image: Reuters/Mike Hutchings/Illustration

The rand, which managed to avoid a major blowout following riots in two of South Africa’s key provinces in July, finally gave way and weakened below the psychological R15 to the US dollar level on Thursday.

This is its weakest level since March.

Listen: Are we seeing rand weakness or dollar strength?

The local currency hit R15.17 to the greenback around 10am, after breaking above the R15 mark in early morning trade on Thursday.

While the decline is being largely attributed to a surging dollar, the fact that the JSE was offline to trading for most of Wednesday may have also been a factor in the currency weakening.

The more than five-hour outage on the JSE prevented trade in stocks “until well into the afternoon on Wednesday” Bloomberg reported.

Read:

Frustrated JSE traders forced out for a walk as bourse paralysed

JSE stock trading to resume after delay caused by record volumes

It said that this was “not a good signal for a bourse that touts itself as Africa’s finest” and “in a country that needs to attract foreign investment to help fuel growth and reduce unemployment”.

Regarding the surging dollar, Andre Cilliers currency strategist at TreasuryONE, flagged in a note on Thursday morning that the US Federal Open Market Committee (FOMC) meeting influenced the stronger dollar.

“Last evening [Wednesday] the FOMC minutes stated that there is a likelihood of the Fed starting the taper off their bond purchases to the back end of this year. The statement of the Fed was also outlined with some misgivings [around Covid and inflation in the US], which have caused the markets to trade in a rollercoaster fashion since the release of the minutes,” he says.

“What did the FOMC minutes mean for the rand? The rand dipped to R14.85 after the release of the minutes, but after the initial drop, the rand weakened in the face of a stronger dollar,” adds Cilliers.

“Currently, the local currency is trading at R15.03, with the momentum stacked against the rand and emerging markets today,” he points out.

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Wait till the Fed starts tapering….the South African Runt will then live up to its name.

The FED is in a tight spot.

$31 Trillion in debt, 30% more Dollars printed since Jan 2020.

It needs to create jobs and keep inflation down also.

If it increases interest rates too fast it will crash the market and kill its own economy also.

Plus what is a 0.25% interest hike? will it make anyone rich?

Not to worry, we have a number of skilled parliamentarians who can “pick it up again”.

Im glad I picked up dollars and Crypto!

Insulate myself from the parliamentarians and the bozos that want to destroy SA.

This is dreadful news for South Africa. Fuel price and food prices will have to increase with inflation(in time and despite very low demand driven inflation) and probably interest rates (in time).

The US Fed has more influence over our economy than the entire government which seems to excel at one thing only ie stealing! and now they want a first world style social services levy of 12%-tell people earning less than R300k per annum that they have to pay 12% more to have that 12% stolen…may make the KZN looting orgy look tame!!!!

Best to boycott this abominable currency. Get as much external currency, precious metals and crypto as you can to be independent. Keep your debt in ZAR.

Bought a lot of very cheap g o l d m i n e r s and p l a t i n u m.

Resources is all that works in SA.

You can squeeze it, turn it 360 degrees, up side down, down side down, west, east, north, south – Only resources work!

Just a matter of time.

Over 5, 10, 15 and 20 years the rand has generally weakened against all other currencies at the inflation / interest rate differential between SA and the relevant other country. There has obviously been violent short term fluctuations, but that’s for forex traders.

When ,no longer if , NHI ,a universal grant (bribe) and allowing people to get at their pension early all happen ,the Zimbabwe Dollar will look like a first world currency Vs the Rand .
Like our Ports the ANC must be ranked amongst the worst govmts in the world . ( We even promote the most clueless of cadres who screw up Defence to House speaker)
This country is a sick joke .

From a fuel price perspective one starts getting tempted to say bugger it, just start fracking for shale gas in the Karoo – get away from this goddamn dependency on imported crude oil! ???

No need for fracking, just get gov to open up the pipeline Moz gaa. Moz got almost unlimited off shore gas reserves.

End of comments.

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