The rand was in a stable range on Tuesday morning but remained fragile and vulnerable to fresh news flow due to the standoff between the Hawks and Finance Minister Pravin Gordhan.
“The political risk premium in the rand continues to grow‚ as evidenced in continued rand underperformance relative to other risk currencies‚” Rand Merchant Bank currency analyst John Cairns wrote in a note.
In between‚ the rand has been buffeted by the rising dollar amid speculation that the US Federal Reserve might raise interest rates in 2016
To this end‚ investors will keep tabs on the US nonfarm payrolls data on Friday‚ which will shape the Federal Reserve’s view on rates.
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The US economy is expected to have created 190‚000 jobs in August‚ according to Trading Economics
In a sharp about-turn‚ the rand has weakened from R13.20/$ just a few weeks ago to R14.45/$ currently.
The volatility in the exchange rate is likely to put pressure on the Reserve Bank‚ which meets in September to decide on rates.
At 9.03am‚ the rand was at R14.4507 against the dollar from R14.4086 at the previous close.
It was at R16.1437 against the euro from R16.1221 previously‚ and at R18.8890 against the pound from R18.8811 previously.
The euro was at $1.1171‚ from $1.1189 at its last settlement.
- TMG Digital/BDlive
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