The Rand started the week on the defensive against major currencies, as the upcoming US elections kept investors nervous about policies in the largest economy.

The Rand subsequently hit a two week high on Wednesday, after it was announced that Barack Obama had won a second term in the White House. Investors have indicated however, that the longer-term implications of Obama’s victory for the Rand are not clear cut (Fin 24).

Between 5 November and 9 November one Great British Pound fetched between R13.81 and R14.06 South African Rands. The Rand also fetched between R8.64 and R8.78 to the United States Dollar. One Euro fetched between R11.04 and R11.26 to the Rand.

The Rand steadied against the Dollar in early Tuesday trade, as investors were unwilling to take strong positions until after the US election and a Greek vote that will determine whether the country receives more bailout assistance.

After a brief spike in the Rand on Wednesday, Thursday afternoon saw the Rand weaken again as traders reacted to disappointing local data and worries that the EU was sliding further into recession. “Anything that is negative for the Euro is negative for the Rand. Rumours that the ECB is not ready to start a bond buying programme next week has put extra pressure on the euro and is not good for liquidity. Liquidity is important for emerging markets and the Rand‚” (Fin 24).

The Rand lost gains from earlier trading as the Dollar gained strength on Friday afternoon.

The Rand started this week much the same as it started the previous four weeks, namely in a fairly tight range bound environment where the USD-ZAR is simply not reflecting any substantial directional momentum (Investec).

GBP / ZAR: 13.83
EUR / ZAR: 11.06
USD / ZAR: 8.70

Correct at 8.14am, 12 November.

Note: The above exchange rates are based on “interbank” rates.
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