The rand traded at fresh lows in the morning session on Monday (23 March), as coronavirus continues its rapid spread in Europe and the US over the weekend.<\/p>\n
Bloomberg reported that the greenback soared against emerging-market currencies including the rand as investors piled into haven assets on fears that the coronavirus will send economies into freefall.<\/p>\n
\u201cThe dollar is rallying on haven demand — markets are digesting the implication of job losses, a prolonged economic downturn,\u201d said Christopher Wong, senior foreign-exchange strategist at Malayan Banking Bhd. Currencies \u201cprone to capital outflows and those that were people\u2019s favorite carry trades\u201d are vulnerable to fresh selling pressure.<\/p>\n
Bianca Botes, treasury partner at Peregrine Treasury Solutions, noted that measures against the spread of Covid-19 coronavirus have intensified, which will have a knock-on effect on the global economy.<\/p>\n
“Airlines continue to cancel flights and countries intensify lockdowns in an effort to halt the rapid spread of the Covid-19 virus. The virus now has a global death toll of more than 14,600 people, and the number of active cases has topped 224,000 worldwide,” Botes said.<\/p>\n
“Meanwhile, the race for cash saw global markets come under pressure yet again in overnight trade, with the rand trading at fresh lows.”<\/p>\n
“We will keep our eyes on policymakers, and wait for the address from president Ramaphosa on the coronavirus crisis,” Botes said. Ramaphosa is expected to offer some guidance on additional steps that may be taken to address the pandemic\u2019s economic impact, as well as the possible tightening of restrictions as the number of confirmed cases in South Africa reaches 274.<\/p>\n