The rand fell sharply early on Wednesday morning as the dollar soared in Asia, as results so far seem to indicate victory for Donald Trump in the US election.
At 8.39am the rand was trading at R17.7758/$, more than 30c weaker than at 7pm on Tuesday when it stood at R17.4365/$.
The rand has recently had a strong run as uncertainty prevailed in the run-up to the polls.
Though the final results are yet to be announced, including those for key swing states, indications are Trump will reach the 270 seats required for victory. Reuters reported that global investors were increasingly pricing in a win for Republican candidate Trump.
“At some point you have to make up your mind and take action. I think it’s become easier to make a move under this scenario of a Trump victory,” Reuters cited Katsutoshi Inadome, senior strategist at Sumitomo Mitsui Trust Asset Management, as saying.
The market may experience some continued volatility, however, before a definitive winner was declared, he added.
Reuters also reported that analysts generally assumed Trump’s plans for restricted immigration, tax cuts and sweeping tariffs would put more upward pressure on inflation and bond yields, than Kamala Harris’ centre-left policies.
Trump’s proposals would also tend to push up the dollar and potentially limit how far US interest rates might ultimately be lowered, the news agency reported.
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