Rand in a state of confusion

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Bianca Botes, Corporate Treasury Management at Peregrine Treasury Solutions

The rand seems to be in a state of confusion at the moment.

The dollar had given up some ground yesterday following China’s announcement of a potential change in its US Treasury buying strategy, but quickly recovered, and the stronger USD and the continued Zuma saga continue to weigh on the rand. However, the rand is supported by stronger commodity prices and the afterglow of Cyril Ramaphosa’s NEC victory.

Markets are also disappointed in Zuma escaping a much-anticipated recall by the governing party.

The rand is currently doing a balancing act between politics and economics.

The ZAR tested a break above R12.50 a few times yesterday, but lacked momentum, quickly retracing to the mid R12.40’s following each break.