CAPE TOWN – So the rand party is over… The domestic currency yesterday took a pounding like never before, tanking more than 50c in less than 36 hours and crashing through the R14 mark to R14.15 a dollar – it’s lowest in six weeks.
Analysts said the rand and other emerging market currencies were on the back foot due to geopolitical concerns and the negative impact of the US-China trade spat on global growth, with Turkey’s lira and Russia’s rouble being the hardest hit.
US President Donald Trump tweeted that he had authourised a doubling of tariffs on steel and aluminium from Turkey. He said levies on steel would be 50 percent and aluminium 20 percent, sending the lira tumbling as much as 14 percent against the greenback.
Dynamic Outcomes head market analyst and director James Paynter said a near 70c move since the low for the week on Tuesday was scary stuff. “There is surely going to be more volatility and action… and I suggest you keep an eye on the market over the next few days.”
At 5pm the domestic currency was bid 47c weaker than Wednesday’s same time bid at R14.05 a dollar. Against the pound sterling the rand tanked 46 to R17.94 and to the euro, the currency weakened 34c to R16.06.