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Rand expected to weaken
The good news for the rand is that commodity prices are hovering near an eight-year high. The bad news is that raw materials matter less for South Africa’s currency than movements in U.S. Treasury yields.
The correlation between the Bloomberg Industrial Metals Sub-Index and the rand has weakened to 0.2, from a peak of 0.7 in February.
The inverse relationship with U.S. Treasury yields is much stronger, at almost 0.6, the most in in four years, according to data compiled by Bloomberg.
[Bloomberg]
The good news for the rand is that commodity prices are hovering near an eight-year high. The bad news is that raw materials matter less for South Africa’s currency than movements in U.S. Treasury yields.
The correlation between the Bloomberg Industrial Metals Sub-Index and the rand has weakened to 0.2, from a peak of 0.7 in February.
The inverse relationship with U.S. Treasury yields is much stronger, at almost 0.6, the most in in four years, according to data compiled by Bloomberg.
[Bloomberg]
