Rand falls as Trump takes the lead
The rand lost 65c in early trade on Wednesday, tracking losses in the dollar and Mexican peso as early results show Donald Trump has captured the key battleground state of Ohio.
Markets are selling off, with the Mexican peso down 11%, and pulling other emerging markets down as well, said TreasuryOne in a note to clients.
The rand, which lost almost 5% to R13.83 from an overnight close in New York of R13.18, was still 3.7% weaker at R13.71 by 06:43.
US equity futures are down 4%.
The Mexican peso, a barometer of Trump’s fortunes, tumbled the most in eight years to a record low, while the Turkish lira sank to an all-time low and the South African rand fell the most in four weeks as traders dumped all but the safest assets, reports Bloomberg.
The dollar fell as much as 3.5% against the yen, the biggest intraday decline since the UK’s decision to exit the European Union, 1.8% against the euro and 2% against the Swiss franc.
“Trump has won the battleground state of Ohio, which was key. This caused equity markets as well as currencies to take a plunge. The Mexican peso lost over 10% to trade at a record low. The rand also lost 4.5% to trade at R13.80,” said TreasuryOne.
“As it stands, Wisconsin or Michigan can take Trump over the line! If (Hillary) Clinton manages to come back and win both Michigan and Wisconsin, the election comes down to Nevada or New Hampshire.
“Trump would have to win both; Clinton would only need one of the two. The predictions currently puts a Trump win at around 95%.
“We can be in for a very bumpy ride today,” said TreasuryOne.