The rand came within a few cents of the R13/$ level in the late afternoon on Tuesday as US housing data indicated a stronger US economy‚ further supporting the case for a rate hike in the world’s largest economy this year.
The dollar gained against the euro in response to the data‚ which sent emerging market currencies such as the rand weaker again.
The rand was also markedly weaker against the pound after UK consumer inflation came in higher than expected‚ supporting risk-off trade.
The market is now awaiting the release of minutes from the last US Federal open market committee meeting on Wednesday for further clues on whether the interest rate hike will be in September or December.
At 3.30pm the rand was at R12.9612 against the dollar from a previous close of R12.8988. It weakened to an intraday low of R12.9715.
Against the euro the rand was at R14.2977 from a previous close of R14.2870. Against the pound‚ the rand was at R20.3225 from R20.1054.
The euro was at $1.1032 from $1.1076.
Investec economist Annabel Bishop said markets were very volatile. The rand continued its weakening streak against the dollar in its “run toward the key resistance level of R13/$”.
“It might just prove to be the best thing for a 25-basis-point interest rate hike to occur in the US in September.”
That would “take the heat out of” the market generated by the uncertainty as to when the “lift-off” of US interest rates would occur‚ Bishop said.