A Perspective on Rand Weakness Against the USD

With the rand breaching R13/USD for the first time in 14 years, it is timely to look at how major currencies have fared against the dollar over the period 25 July, 2014 – 14 August, 2015 and the analysis is interesting.

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The above graph (click on graph for greater clarity) shows that:

  • Nearly all major currencies have weakened against the USD, with emerging and commodity currencies * being particularly hard hit.
  • Developed commodity currencies, e.g. Australian, New Zealand and Canadian Dollars have performed worse than the rand over this period.
  • The rand has performed in line with major currencies such as the Japanese Yen and Euro.
  • The British pound has been one of the better performing currencies against the USD.
  • The Chinese Renminbi, even after the recent devaluation, remains a top-performing currency against the USD in contrast to other emerging markets**.
  • Of the BRICS (Brazil, Russia, India, China, South Africa), South Africa has fared better than both Brazil and Russia.

*  Commodity currencies is a name given to currencies of countries which depend heavily on the export of certain raw materials.
** SA is considered to be an emerging market along with, for example, Brazil, Russia, China, India.

Source:  Brandon Zietsman, CEO, PortfolioMetrix