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President Donald Trump smiles at supporters after a campaign rally at Gerald R. Ford International Airport earlier yesterday before the vote in Grand Rapids, Michigan. Trump supporters packed airports late at night in the cold to attend his latest rallies as he sought re-election. PHOTO: AP
The rand has weakened due to growing market unrest following US elections that saw incumbent President Donald Trump prematurely and incorrectly claiming victory in the wee hours of the morning. He threatened to break the R16 / $ on Tuesday for the first time since March in the hope that the Democrats will triumph over the Republicans.
But overnight, the rand fell back as Trump and his Democratic adversary Joe Biden were head-to-head at the polls. The local currency was trading at R16.28 / $ at 11:57 am, having weakened to 2.04%.
Matete Thulare, an analyst at Rand Merchant Bank, said the weakening rand is testimony to the volatility the market is currently facing.
“As a market, we are actually looking forward to it, as nothing is certain at the moment. Trump threatening to go to court is not really helpful either. That is why even commodities are fluctuating,” he said.
Thulare said the market was bracing “… to look forward to the results, which means we can anticipate even higher volatility.”
Andre Botha, Senior Distributor for TreasuryONE, said anything is possible in US elections.
“The key decisive states will give the final winner to see who gets the 270 key electoral votes first. It will most likely depend on who Pennsylvania wins to determine the winner of the election.
“If the US elections do not get a clear winner and are contested, then we may have a difficult journey and the top of the wedge can be tested,” he said in a note.
JSE all’s stock opened 0.34% weaker at 53,006.44 points, but has gained momentum and consolidated 0.89% at 53,683.42 points.
Economists have said that if former Vice President Joe Biden wins, markets will likely have a negative reaction in the short term because he is less business-friendly, yet South Africa would benefit from US economic stability.
