South African Rand Resumes Trend

The South African Rand is not the subject of much analysis in the forex community, which typically confines itself to the majors and the BRIC currencies - Brazil, Russia, India, and China. But recently, the Rand found itself on the radar screen  of at least one analyst, who pondered the implications of a growing trend towards risk aversion. It appears that the Rand has resumed a clearly identifiable downward path against the Dollar, a course which had been temporarily interrupted in the early years of the decade.  Now, inflation is picking up  again and investors globally are becoming more hostile towards risk, two factors which bode ill for the Rand.  On the other hand, South Africa is rich in natural resources; judging from the performance of the Canadian Loonie and the Australian Dollar, commodity economies are still in vogue. The Times reports:

The curve ball for precious metals would be a sustained stronger
dollar, unlikely while the US economy is in its current predicament and
the Fed is cutting rates.

Read More: A warning to beware of banking on the rand