The local currency has lost almost 5% to the dollar over the past month.
The rand took a hit on Monday, breaking through the R19/$ level and trading around its weakest level in a month.The latest bout of weakness is not driven by South African factors – instead, fear and uncertainty have gripped the market, which means investors are dumping riskier assets for the safety of the US dollar, says Schalk Louw, portfolio manager and strategist at PSG Wealth Old Oak.
Data on Friday showed that US producer inflation grew by more than expected in July, as the cost of services rebounded at their fastest pace in nearly a year. A string of weak Chinese economic data has also unnerved the market, with a crisis at the Chinese property giant Country Garden compounding anxiety. The company has some 1.15 trillion yuan in debt, but missed bond payments earlier this month and has warned of large losses amid a slowdown in the local property market.
This has triggered concerns about potential corporate collapses in China in global markets. Usually, the rand bears the brunt of the"risk off" sentiment caused by these concerns because it is one of the most liquid emergency market currencies and can easily be sold off, says Louw. The rand is among the top 20 most traded currencies in the world.
South Africa Latest News, South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Rand weakens ahead of Brics, CPIIn early trade the rand was at R19.03 to the dollar.
Read more »
Khuzwayo: Why Pirates Can Win The TitleFormer Kaizer Chiefs goalkeeper Brilliant Khuzwayo tells Soccer Laduma that competition at Orlando Pirates will make a big difference for the team's ambitions to win titles this season.
Read more »
This is why your skin feels itchy after a hot showerMany people experience itchiness after a shower or bath, and the most common reason is dry skin.
Read more »
| Why are we stalling on female advancement?We have to ask how we are faring in achieving their aspirations.
Read more »
Why others are sceptical of Multi-Party CharterACDP leader Kenneth Meshoe believes the decision to have a pre-election coalition agreement was taken too early.
Read more »