The rand has weakened by 1 percent against the dollar in early trade, as the dollar strengthens against other major currencies.
The dollar’s latest strength comes on the back of higher inflation expectations due to higher oil prices after US President Donald Trump announced that the U.S. would withdraw from a nuclear agreement with Iran and would re-impose sanctions against Iran.
Higher inflation in the U.S. may lead to more interest rate hikes, strengthening the dollar and weakening the rand and other emerging market currencies. The dollar has strengthened around 4 percent in the past three weeks against other major currencies, such as the euro, where the dollar strengthened from $1,24 against the euro to $1,18 currently.
The rand is trading at R12,70 against the dollar from close to R11,50 in February. The rand reached its weakest level against the dollar so far at around R16,50 at the beginning of 2016.
The year has seen its ups and downs with the value of the rand, even earlier this month the rand saw a small increase in value due to the United States Federal Reserve’s tone on monetary policy.
