South African Rand hammered, worst day in 7 years

By FXStreet FXStreet (Bali) – USD/ZAR has pared part of its monstrous gains during Asia, after the spot price rose by over 10% at the open of trade in Asia, reaching its highest level at 17.97, with today’s fall in the South African rand being the worse in seven years since the GFC.

Following a close of 16.30 on Friday, the South African rand was hammered with traders scratching their heads, not finding any fundamental reason behind the dramatic fall. Bloomberg quotes Gareth Berry, a foreign-exchange strategist at Macquarie Bank, saying that the probable cause was “a combination of stops and margin calls that caused mass capitulation” by Japanese retail investors.

Liquidity has been very poor in emerging currencies, with the South African Rand being one of the worst affected amid strong risk aversion in the markets since the start of 2016. Position liquidation has only worsened the picture.
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Source:: FX Street