{"id":459334,"date":"2021-01-06T14:11:28","date_gmt":"2021-01-06T12:11:28","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=459334"},"modified":"2021-01-06T14:11:28","modified_gmt":"2021-01-06T12:11:28","slug":"this-bank-took-a-knock-betting-on-the-rand-this-week","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/459334\/this-bank-took-a-knock-betting-on-the-rand-this-week\/","title":{"rendered":"This bank took a knock betting on the rand this week"},"content":{"rendered":"

South Africa\u2019s volatile currency caught Citigroup Inc. in a wrong-way bet within a day.<\/p>\n

The New York-based lender recommended a short-dollar position versus the rand on Monday, betting the South African currency would strengthen along with emerging-market peers as uncertainty around fiscal stimulus in the U.S. weighed on the dollar.<\/p>\n

Instead, the rand plunged more than 2% on Tuesday as traders fretted about a resurgence in coronavirus infections and the possibility of stricter lockdown restrictions in South Africa, taking it above the level where it triggered a stop-loss on the position.<\/p>\n

The odds were already stacked against the trade, based on historical data. The rand has weakened against the dollar in January in seven of the past 10 years, according to data compiled by Bloomberg.<\/p>\n

\"\"<\/a><\/p>\n

\u201cIt takes a brave analyst to bet against dollar appreciation against \u2018the rattler\u2019 in January,\u201d said Warrick Butler, the Johannesburg-based head of foreign exchange trading at Standard Bank in a note to clients. That\u2019s \u201cthe nature of the beast,\u201d he said.<\/p>\n

Citigroup entered its short-dollar trade 14.52 rand, targeting a move to 13.57. Instead, the currency weakened beyond the 15.05 stop level before regaining some ground. The rand was little changed on Wednesday at 14.9946.<\/p>\n

The next levels to watch for the dollar-rand cross are 15.15 and 15.35, with a breach of the latter signalling further losses to as much as 16.10, said Butler.<\/p>\n

\n

Read: South African stocks climb as platinum miners rally<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

South Africa\u2019s volatile currency caught Citigroup Inc. in a wrong-way bet within a day.<\/p>\n","protected":false},"author":59,"featured_media":336531,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[26],"class_list":["post-459334","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/459334","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=459334"}],"version-history":[{"count":5,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/459334\/revisions"}],"predecessor-version":[{"id":459348,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/459334\/revisions\/459348"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/336531"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=459334"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=459334"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=459334"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}