The rand continues to trade at its weaker level against a basket of major currencies, after having weakened by 2.5% on Tuesday afternoon.
In midday Asian trade and nearly two hours before the opening of the JSE, the rand is trading at R18.33 to the dollar.
This is a good example of the rand’s volatility, as it strengthened by nearly 5% last month, and reached nearly R20 to the dollar at the beginning of June.
In light of this volatility, the rand’s current weakness can be seen as a correction from an overbought position in July.
However, the fact that manufacturing activity contracted for a sixth consecutive month in July, is also contributing to current rand weakness.