Battered Rand Lost against Dollar....

SOUTH AFRICA- Sentiment among domestic investors was severely rocked at the weekend after the rand took a beating and the market, led by brittle commodity counters, fell sharply.

The rand lost 30c against the dollar to plunge to its lowest level yet, with ominous warnings that the local currency could weaken further in the weeks ahead.

 

The JSE all share index — traditionally a beneficiary of a weaker rand — dropped more than 2% on Friday after strong US economic data put a rate hike in that country next month firmly on the table.

The rand traded close within a fraction of R14.20/$ in the late afternoon trade, surpassing its previous low of R14.1595/$, recorded at the end of September. The rand, which closed at R13.89/$ on Thursday, fought back slightly before market close to finish at R14.16/$.
Standard Bank trader Inshaan Omar said the recent spate of data in the US, as well as rhetoric from various US Federal Reserve (Fed) speakers, was undoubtedly skewing the market for a stronger dollar on a US rate increase.

Technical analysis indicated that the domestic currency would weaken further to R14.45/$, Mr Omar said.
US employers added a seasonally adjusted 271,000 jobs last month, way better than the expected 182,000.
Figures for the prior two months were also revised up by a combined 12,000 to 153,000 for August and 137,000 for September.
The better-than-expected numbers make it more likely that the Fed will hike interest rates next month, for the first time in nearly a decade. Barclays Research analysts said in a note they now expected a December rate hike to happen.
It was previously thought that the hike would occur only in March next year.
"The October payroll report was very solid and exhibited broad-based strength."
The payroll suggested that "US labour markets had fully rebounded after slowing in August and September", Barclays said.

TreasuryOne chief dealer Wichard Cilliers said Fed concerns on inflation might put a break on further rand weakness for now. He said there were two legs to the Fed conundrum: the first was employment and the second was inflation.
That had been suppressed due to the low oil prices and global slowdown.
South African bonds also lost substantial value in line with the much weaker rand. At 5.30pm, the benchmark R186 was bid at 8.540% and offered at 8.535% from a Thursday close of 8.430%.