Rand touches worst levels ever against the dollar

South Africa’s rand fell to its weakest on record against the US dollar, surpassing a level it last hit in June 2023 as investors reacted to the global trade war and fragile local politics.

The currency reached 19.9328 per dollar in Johannesburg. It pared the loss to trade at 19.8250 at 17h30.

“The rand is being pummeled by the triple whammy of being used as the liquid EM bellwether currency to hedge against under-performance in risk assets, as well as by the ongoing collapse in commodity prices, and by the internal domestic turmoil presented by instability in the governing coalition,” said Phoenix Kalen, head of emerging markets research at Societe Generale in London.

The rand is among the most liquid currencies in developing markets, and is often used as a proxy for risk sentiment. 

“With trade uncertainties high, asset price volatility elevated, and global growth probabilities continuing to be revised lower, we expect short-term weakness in ZAR to continue,” Kalen said.