CD South Africa: Chaos hits global markets

Currencies Direct August 24th 2015 - < 1 minute read

An 8% drop in Chinese stocks has sent panic through the market and left the rand floundering like a fish out of water. With a close of 12.95/$ on Friday, USD/ZAR was quoted at up to 14/$ in Asian trade this morning (ouch!). EUR/ZAR hit 15.50/€, GBP/ZAR hit 21.30/£ and USD/ZAR came close to danger as it flirted with 14/$, shortly after markets opened in China. The local unit has lost more than 7% and starts off this morning at 13.30/$, 15.22/€ and 20.86/£.

Huge two-way risks are evident today, with risky assets getting smacked while investors retreat to safe havens. With Wall Street dropping more than 3%, it appears as if a September rate rise for the US Federal Reserve could be on hold for now. One big question remains; where to from here for the rand? How’s that to kick start your Monday!

Commentary by Justin Lodewyk

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Currencies Direct

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