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The rand hits another new low against the pound

by , 17 August 2015

After a rollercoaster ride last week, the rand has kicked off the new week still hovering at multiyear lows against the dollar.

The local unit is also trading at all-time lows against the pound.

So what's going on? And what does this week have in store for the rand?

Read on to find out…


The rand struggles to hold its ground


In early trade this morning, the rand managed to trade on “a slightly firmer footing against the dollar,” reports IOL. But it’s already trading weaker.

The rand is still trading at fresh lows against the pound.

In spite of this, traders forecast the local unit to trade sideways today following the volatility seen last week, adds IOL.

Last week, the rand fell after the Chinese central bank decided to devalue the yuan for three consecutive days.

Adding pressure to the currency was “a threat of a wage strike in the gold sector and power problems” continue to damage confidence in the country, notes iAfrica.

Standard Bank’s Warrick Butler, said that with “no major economic data” due out today, the rand should stick within “current trading ranges,” says BDLive. There shouldn’t be “any fireworks at all”.


The rand has R13 to the dollar in its sights


After the rand lost nearly 2% last week, it’s “edging nearer to the R13 psychological mark against the dollar,” reports Fin24. Analysts at NKC African Economics expect the rand to test this level “in the run-up to an expected start of US monetary policy normalisation next month”.

Later this week, the rand could come under continued pressure before the release of the US Federal Reserve’s minutes from its monetary policy committee meeting at the end of last month on Friday.

At time of writing, the rand was trading at R12.87 to the dollar, R14.25 to the euro and R20.14 to the pound.

So in spite of an expected quiet day, increased volatility could return later in the week.

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The rand hits another new low against the pound
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