Cape Town - The rand weakened by 0.5% in early trade on Wednesday morning, opening at R11.82 to the dollar and changing hands at 11.87 by 11:00.
Analyst Andre Botha said that, with little local economic data set to be released this week, the local currency was tracking how the trade dispute between the US and China would play out.
“The main direction for the rand will be from offshore,” said Botha, a senior currency dealer at TreasuryONE.
The market was concerned about the impact of the "trade war" between China and the US, he said.
“This has made the market cautious to take a view, and we have seen muted trade across the board. These protectionist policies that the US wants to implement is a sure sign that (it) would like a weaker dollar.”
“The rand will take its cue from the US in the short term both in sentiment and data with the US non-farm payroll numbers coming up on Friday,” he added. “Expect a slow week with the rand trading in tight ranges which might come undone on Friday afternoon after the non-farm payroll release.”
NKC African Economics, in a research note, said it expected the rand to trade in a range of between R11.75/$ and R11.95/$ on Wednesday,
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