By Maarten Mittner, Business Day Live. Picture: GALLO IMAGES/FOTO24/LOANNA HOFFMAN
The rand was weaker in the late afternoon on Monday with technical analysis indicating the local currency is now in uncharted territory.
Analysts predict the rand will lose further ground when the US is expected to hike interest rates in December.
The rand hit a fresh low of R14.29/$ on Monday with R14.45/$ the next important resistance level. It has never before traded at these levels so that resistance levels have to be measured in nominal terms.
At 3.31pm the rand was at R14.2621 to the dollar from a previous close of R14.1962.
The rand was at R15.3456 against the euro from R15.2003 and at R21.5057 against the pound from R21.3752.
The euro was at $1.0760 from a previous close of $1.0726.
Bidvest Bank treasury head Ion De Vleeschauwer said there is unfortunately not much to stop the rand from weakening further. The key will be economic data released in the coming weeks in the US.
"If they come in much better than expected, such as Friday’s nonfarm payroll data, the market will begin to price in further rate hikes."
This will lead to renewed dollar strength and rand weakness.
There could be some respite for the local currency if the Reserve Bank increases local rates at the next meeting of the monetary policy committee in two weeks’ time.
"The question is if they will be pro-active and hike or wait until the US Federal Reserve is set to hike in December," Mr De Vleeschauwer said.