Rand Slammed by Perfect Storm of Market Risks: Gold Steady

It has been a painful trading week for the South African Rand which is currently on track to securing the title as worst performing emerging market currency since Monday, after suffering weakness by roughly 2.63%.
Lukman Otunuga

Open your FXTM account today

The USDZAR touched its highest level since October 2018 earlier this morning as the perfect storm of market risks rapidly eroded appetite for the South African Rand. One thing is for certain, the Rand is clearly unamused by headlines that David Mabuza is in the running to become re-appointed as Deputy President and this continues to reflect in the currency’s valuation. When factoring in how Mabuza has previously been previously linked to a number of scandals that have taken place, these reports that he re-appointed as deputy president are raising questions over Cyril Ramaphosa’s efforts to end corruption as stated during his inauguration speech as South African President on Saturday.

Emerging market currencies feel the heat

Persistent US-China trade tensions, Brexit and concerns over slowing global growth have certainly left a mark on emerging market currencies. The general lack of appetite for risk amid the growing uncertainty has offered nothing but pain to most major EM currencies this week. With the mood across financial market negatively impacted by geopolitical risk factors and risk-off becoming a recurrent theme, this will spell trouble for EM currencies in the short to medium term.

Commodity spotlight – Gold

One would have expected Gold prices to push higher given how trade concerns and Brexit continue to accelerate the flight to safety.

It seems investors are rushing towards the Dollar instead which is still seen a prime destination for safety in times of uncertainty and unease. While Gold is positioned to remain buoyed by risk aversion, upside gains will most likely be limited by an appreciating Dollar. The precious metal is poised to swing back and forth within a modest range until some sort of catalyst is brought into the picture. Technical traders will continue to closely observe how Gold behaves above the $1280 support level. Should this level prove to be reliable support, prices have the potential to appreciate towards the psychological $1300 resistance.

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All

Top Promotions

Top Brokers

IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US