The Rand weakened on Monday due to traders citing that the currency was overvalued after an overreaction to the release of the latest US jobs figures last Friday.
The Rand had strengthened against the US Dollar for a fifth-day as a technical correction caused investors to try and cover short Rand positions. Investors took a more risk on approach to the currency as a result.
“We probably saw a little bit of an overreaction on Friday,” said Ockert Van Niekerk, the head of trading at PSG. “We saw a big move following the release of US jobs data on Friday back up to R8.85 levels.”
A number of economists are forecasting that the South African currency could decline over the next two-months.
Leon Myburgh a strategist at Citigroup said, “The Rand is the only emerging market currency to have lost ground against the Pound this year, which makes it a significant underperformer. It’s symptomatic of socio-political concerns about South Africa in the minds of foreign investors and our inability to grow exports due to labour unrest, low productivity and high utility prices.”
The currency could experience volatility over the course of the week due to a number of data releases set to be released. The data includes the latest jobless and manufacturing figures which will be a good indicator for the pace of the nation’s economic growth or lack of.
Rates correct as of 11:15am
The South African Rand to Pound exchange rate is currently trading at 0.07128
The South African Rand to Euro exchange rate is currently trading at 0.08261
The South African Rand to US Dollar exchange rate is currently trading at 0.11203
The South African Rand to Australian Dollar exchange rate is currently trading at 0.1074
The US Dollar to South African Rand exchange rate is currently trading at 8.92629
The Pound to South African Rand exchange rate is currently trading at 14.0297
The Euro to South African Rand exchange rate is currently trading at 12.10484