exchange rates news

South African Rands breaks through R8.50 Barrier

The rand reached 8.50 against the dollar in afternoon trading on Wednesday the 23rd of september 2011. As a result it hit its worst level in 2011 on growing concerns of a recession in europe.

Rand roaring back

The South Aftican Rand (ZAR) has recovered form it worst levels in the last few days and is Currently Trading at 7.79 to the US Dollar.

The rand is taking leads from  the euro which has recovered quite a bit. The market has also been a bit short and we’ve seen some export selling which have also helped to strengthen  the rand,” a currency trader said.

Although stronger the Rand will still be a highly volatile currency in the near future

Rand Takes a Beating

2011/09/22, The rand took a beating against all major currencies, panic buying of dollars by importers and a general negative sentiment about the eurozone is hurting the rand badly. South Africans will have a brace themselves for a higher inflation outlook, higher petrol prices and more expensive imported electronic gadgets

South African Rand Under Pressure

The rand being fairly strong the last few months is under pressure and has hit a 14-month low against the dollar on Tuesday the 20th September 2011 , with many factors pointing to more losses for the Rand, already the worst performing Currency among emerging market currencies.

The rand has lost close to 5% to the dollar so far this year, but it is still up about 20% since the beginning of 2009. The strong South African Rand has managed to keep inflation low for the last few years, but with the currently weakening of the South African Rand the outlook for inflation increase is looming

Walmart Deal boosts South African Rand

The rand was showing stronger against the dollar in late  trade on Tuesday after the Competition Tribunal said it had approved the merger between retail giant Walmart and Massmart Holdings with the conditions as proposed by walmart and massmart (makro,dion wired,builders warehouse and game)

The rand/dollar has broken the R6.82/$ level, which is excellent  for our currency

The Walmart deal will bring a lot of positives to South Africa, for the economy and consumers alike

Rand/Dollar breaches R7,00 on 2011/05/13

The rand fell more than 1.6% against the dollar during trade on Friday, breaching R7.00/US Dollar for since  nearly 2 months on troubles concerning the eurozone debt which have investors think twice about risky assets.

Is this the beginning of the end to a strong Rand, certain analyst certainly think that the Rand is not going to hold up to its strength of the last few months

Dollar Weakness

The current strength of the South African Rand is mainly caused by a weak US Dollar.  Many Analysts say the dollar may find some short-term improvements as investors and Forex hedging cover short positions in the currency, but many insist the trend for dollar weakness (the US dollar becoming weaker) is there amongst ongoing speculation the Federal Reserve could ease US monetary policy further.

The US actually benefits from a weaker US Dollar as it will improve their export competitiveness. (They will be able to export goods at a competing rate)

Rand below the 7 Rand to the US Dollar

For the first time since 2008 the South African Rand rand has strengthened to below the important magical  level of 7 to the dollar, to 6.98 at 11:34am on 2010/09/22.

Rand strength is basically being driven by the weakness of the dollar.

Is the time right to buy dollars now or can the South African Rand improve more against the weakening US Dollar ?

South African Rand (ZAR) Volatility

The movement of the Rand is influenced by multiple factors that are constantly changing. In order to accurately forecast/predict the direction of the Rand, the primary driving force behind the Rand needs to be identified. This, in itself, is a challenging task, as economists more often than not have conflicting and differing views and don’t often reach consensus when forecasting the value of the Rand.

In the past few weeks market participants have once again been surprised by the movement of the Rand. This time bythe shear strength of the currency, resulting in it now being branded as overvalued. This recent Rand strength can,amongst other things, be attributed to dollar weakness and euro weakness due to the financial crisis of certain eu member countries, a strong recovery in the price of commodities, an improvement in global risk appetite and the wide interest rate differential between SA and the rest of the world.

A number of economists have pointed out that a strong Rand has contributed to the disappointing and below expected manufacturing and mining data, mainly due to a weaker exports. On the other side, a strong Rand (ZAR) bodes well for imports.

From a the ordinary man on the streets point of view a strong Rand is positive. It drives inflation lower which in turn increases consumer’s real household income.

Extreme volatility in the Rand can translate into  profits or losses over the shorter term and in turn increase therisk in your portfolio. Your portfolio manager should  be able to successfully tap into any offshore investment opportunities for better diversification in your assets, but at the same time reduce the inherent risk in the currency market.

Will we be seeing the ZAR trading closer to R8,00 against the dollar by end of 2010 or will the ZAR strengthen what is your opinion