South African rand at 5-month low versus US dollar

South African rand at 5-month low versus US dollar

Story link: South African rand at 5-month low versus US dollar

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The South African rand hit a 5-month low versus the US dollar Thursdasy and dropped against all major currencies after the South African Reserve Bank held the repurchase rate at 11 percent.

In addition, the inflation rate reached 8.6 percent in December, against a target rate of 3 percent to 6 percent, and analysts don’t believe that inflation there has peaked.

It has not helped the country’s economy that most of its mines, smelters and factories have been shot down for the past week due to a shortage of electricity.

The rand fell as low as 7.5576 to the US dollar during the session in Johannesburg and was at 7.4805 to the dollar at shortly after 1 p.m. in New York.

The yen, meanwhile, had its biggest monthly gain versus the greenback in five years, helped by investors who stayed away from risk as equities markets declined during much of the month.

With a gain of 4.8 percent versus the greenback in January, the yen traded at ¥106.3900 to the dollar in early afternoon trade in New York while it was at ¥157.9518 to the euro and at ¥211.5563 to the pound.

In addition, the yen was up 3.8 percent versus the Brazilian real during the month and added 5.3 percent in relation to the Canadian dollar.

The US dollar was trading at $1.4846 to the euro in early afternoon trade in New York, a gain over Wednesday’s close but the greenback lost 1.6 percent to the euro in January.

Despite the day’s gain against the euro, the outlook for the dollar against the shared currency remains shifted toward weakness after the Labor Department reported that first-time unemployment claims rose by 69,000 to 375,000 in the week ending 26 January.