THE RAND yesterday weakened to a two-week low, briefly breaching the R15/$1 mark as a stronger dollar and softer commodity prices weighed on emerging markets currencies.
The dollar was holding steady yesterday ahead of the European Central Bank meeting later this week, but all other currencies weakened.
The rand briefly touched R15.02 to the greenback at lunchtime, before returning 0.74 percent weaker to R14.97 in the afternoon by 3pm.
Lower prices for platinum, gold, and steel also dragged the rand lower after a rally it had at the beginning of the week on the back of a risk-on sentiment in global financial markets.
The rand currently has averaged R14.82 to the dollar so far this month. Investec chief economist Annabel Bishop said the rand was facing headwinds this week.
“The rand is likely to remain highly volatile, heavily afflicted by events in global financial markets, but still tending towards R14.70/$1 this quarter, although US data outcomes this week may have the potential for a severe impact on the rand,” Bishop said.
Mining stocks on the JSE also slid yesterday, save for Royal Bafokeng Platinum, which jumped 16 percent after it announced a planned acquisition by Impala Platinum.
Energy stocks fell 1.4 percent after the state-owned power utility, Eskom, announced further electricity shedding across the country due to additional shortages in generation capacity.
TreasuryONE's currency strategist, Andre Cilliers, said the rand had closed weaker at R14.80 on Tuesday after having tested the R14.85 technical level earlier.
“A stronger dollar and softer commodity prices have put some pressure on emerging market currencies, and the rand has weakened further in the Far East,” Cilliers said.
“A sustained break above R14.85/R14.90 levels would open the way for further weakness to R15.00.”
BUSINESS REPORT ONLINE