Heightened global risk aversion linked to escalating geopolitical tensions between the US and North Korea weighed on the performance of emerging market currencies this week. Since Monday, out of a basket of 24 emerging market currencies, only the Chinese renminbi, Chilean peso and the Thai bhat registered modest gains. The rand was the worst performer, depreciating by 1.9%. Additionally weighing on the rand were local political developments. Specifically, the announcement on Monday that the no confidence vote against the President would be a secret ballot and the subsequent failed motion on Tuesday induced rand volatility over the course of the week.
The rand is expected to trade in a range of R13.95/USD – R12.95/USD, R16.30/EUR - R15.30/EUR and R18.00/GBP - R17.00/GBP.