Strong dollar pushes down rand, as SA markets wait for Zuma clarity

Cape Town - The rand, which broke below R12 to the US dollar earlier this week, weakened to R12.10 against the greenback in early trade on Thursday. 

This is 21 cents weaker than Tuesday, when it reached an intra-week high of R11.88/$. 

Analysts said the decline was caused by dollar strength. 

Gerrit van Rooyen, an economist at NKC African Economics, said the dollar strengthened overnight after the US Senate agreed on a two-year deal to raise government spending by nearly $300bn, or about R3.6trn at current exchange rates. 

The deal will be put to the vote on Thursday.

"[It] increased expectations of future US growth which bolstered the dollar," he said. 

"The EUR and rest of the majors are under pressure," noted TreasuryONE dealer Wichard Cilliers. "We have also seen gold under pressure as yields rise in the US. The ZAR has just followed the trend."

TreasuryONE dealer Andre Botha, meanwhile, earlier said the local market is taking a wait and see attitude on whether President Jacob Zuma would be stepping down. 

"There are so many rumours floating about that it is difficult to say when, what and where. The market will start to wait for an accurate statement before reacting," he said.