Posted On: January 29, 2013
The monetary unit of the largest economy on the African continent bounced back from its four-year trough against the U.S. dollar on Tuesday amid investors' belief that the monetary unit's losses were overdone, according to Bloomberg.
The rand was around its lowest value since the middle of April 2009 after having lost 2.4 percent against the U.S. dollar during the Monday trading session.
"The move yesterday was perhaps a little dramatic and a touch overdone," states a Tuesday email to Bloomberg penned by analyst George Glynos with ETM Analytics in Johannesburg. "With the rand such a massive underperformer among emerging-market currencies, one feels there is perhaps scope for a recovery."
The Wall Street Journal cited analysts stating the rand remains vulnerable due to a challenging economic tableau in the nation, which includes increasing tensions in the labor market.
Foreign exchange strategist Christian Lawrence with Rabobank in London said the rand has the potential to continue driving lower, particularly in the long-term. He noted that those challenges are still likely even if the monetary unit encounters a measure of stability in the short term.
Category: Industry News
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