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The rand is on shaky ground as investors around the world are on edge over tension between Ukraine and Russia. This is putting pressure on emerging markets and their currencies. Last week, the rand put in its best performance for weeks. And shrugged off news about the larger than forecast trade account deficit. Let's take a closer look at what's going on with the local currency…

The rand weakened 0.5% against the greenback

This morning, the rand was trading at “R10.81 against the dollar,” reports Fin24. Down 0.5% from its close in New York on Friday night.

With a threat of war hanging over the Ukraine from Russia, investors are worried, adds Fin24. Investors are concerned about the recent developments in the Ukraine and it’s weighing on “emerging market assets”.

Over the weekend, Russian President Vladimir Putin “declared he had the right to invade” Ukraine, says BDLive. This is the “biggest confrontation between Moscow and the West since the Cold War”.

On Saturday Mr Putin “obtained permission from his parliament … to use military force to protect Russian citizens in Ukraine,” adds BDLive.

The developments over the weekend led the G7 group to condemn Mr Putin’s moves, notes MoneyWeb.

Risk aversion is growing over tension in Ukraine

Rand Merchant Bank noted this morning that developments in Ukraine have resulted “in an increase in global risk aversion over the weekend,” reports Fin24. And if these tensions continue to rise, there will be “a further fall in global risk aversion and rand weakness”.

And it’s not just developments in Ukraine that could knock the rand.

This morning, analysts at Barclays Research noted that “the rand was likely [to] experience renewed weakness towards R11 to the dollar,” says iAfrica. This is due to a meeting at the European Central Bank and job data out of the US.

At time of writing, the rand was trading at 10.77 to the dollar, 14.84 to the euro and 18.03 to the pound.

So the rand continues to be at the mercy of developments elsewhere. We’ll have to wait how the situation in Ukraine unfolds.