The South African Rand became vulnerable on Wednesday as global stock markets dropped in Wall Street impacting the Asian markets. The rand was trading at R12.7150 to the dollar on Tuesday as analysts sentiments fueled the belief that the Donald Trump administration implementation of their tax plans and details of their fiscal stimulus package would take longer than expected. The Trump administration have yet to appoint certain candidates to positions in the new government. Wall Street saw a sharp drop on Tuesday at the close of markets which impacted the Asian markets at the start of trading on Wednesday morning.
Concern Over Economic Growth and Inflation
An analyst at Nedbank Corporate and Investment Banking thinks that the rand together with other global currencies are at risk and that the Reserve Bank may have to raise interest rates. In his opinion The South African economy is performing below its potential and the weaker rand could cause inflation.
In early morning trading the rand was trading:
R12.7048 vs the dollar
R13.7358 against the euro from R13.7121
R15.8701 against the pound
The Euro was trading at $1.0812 from $1.0807
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