One of the big debates for South African investors at the moment, revolves around the question of whether the Rand is “strong” (on the back of new political leadership) or whether the Dollar is “weak”.
This is particularly topical for investors who are concerned about both the economic and political outlook for South Africa and are considering moving money out of the country. With an interest rate decision due later today, this will be a major talking point for policy makers.
The graph below is the performance of a variety of currencies against the Rand and would suggest that investors wanting to hedge against the Rand, would have done better by gaining exposure to the Pound (Blue line) or Euro (Green line).
The US dollar (Orange) and Aussie Dollar (Red) have tracked eachother quite closely.
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