JOHANNESBURG - The rand was a lot weaker on Thursday morning‚ in a move that emphasised its vulnerability to global market swings.
The local currency flirted with R13/$ earlier this week before reversing course as global risk aversion took hold.
Markets are growing increasingly jittery about whether US President Donald Trump will be able to garner the support he needs to push through his pro-growth agenda.
The uncertainty negatively affected the dollar and US stocks in particular
This did nothing to help the rand‚ though‚ which was dragged to session lows of R13.41/$.
“The dollar weakness should be helping the rand but the acute risk aversion has investors running scared‚”
TreasuryOne dealer Phillip Pearce said in a note. “US Treasury yields have tumbled as we see a flight to safety.”
The weaker rand poses an inflation risk. Consumer inflation has been moderating for several months since peaking at 7% in February 2016.
At 9.29am‚ the rand was at R13.2881 to the dollar from Wednesday’s R13.2048‚ at R14.8087 to the euro from R14.7307 and at R17.2294 to the pound from R17.1158.