The rand weakened on Monday against global currencies as the markets reacted to the assassination attempt on former US President Donald Trump.
The rand was trading at around R18.05 to the dollar at 8.45am and fell even further to around R18.22 at 2.30pm.
The rand was trading at around R17.99 to the dollar at the close of business on Friday.
Analysts said that the assassination attempt impacted investors' appetite for riskier assets like the rand.
The rand was in line with Asian emerging market currencies, according to Reuters.
Andre Cilliers, currency strategist at TreasuryONE said in his research note that the rand would take its cue from other major global currencies.
Jane Foley, senior FX strategist at Rabobank has noted that investors have needed time to digest the assassination attempt on Trump.
She adds that politics in the US have been extremely divided and has now been marred with violence.
“Market pricing, however, can only respond in a binary manner and, for the markets, the complexities of the US political backdrop have been boiled down to the assumption that the weekend events will lead to an increased chance of Trump winning the November Presidential election,” Foley said.
“Investors have already had some time to contemplate what this would mean. The Ipsos poll has been pointing to the possibility of a Trump win on and off this year.
“The dollar has gained ground today on the back of the assumption that a looser US fiscal policy and greater tariffs under Trump would be inflationary and could limit the degree of Fed rate cuts this cycle.”
She went on to add that there have been market expectations of a September Fed rate based on the softening in US economic data.
The rand and other global currencies
The rand was trading at around R19.91 to the euro on Monday at 2.30pm and was trading at around R23.69 to the pound.
Interest rate
South Africans will be looking to the South African Reserve Bank (Sarb) this week as the bank’s monetary policy committee (MPC) will be meeting to discuss a possible interest rate decision.
The Monetary Police Committee will announce a possible rate cut on Thursday.
The repo rate is currently at 8.25% and the prime lending rate is at 11.75%.
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