Rand weakens as U.S. fiscal cliff fears loom

Posted On: December 28, 2012

The South African rand weakened slightly against the greenback as the currency was negatively affected by developments in the U.S. concerning the fiscal cliff, according to Business Report.

The rand was not the sole currency impacted by the looming fiscal cliff, as investors have rushed to safe-haven purchases.

"There is still uncertainty over the fiscal cliff in the US‚ as leaders have hinted that there is no clear-cut agreement at the moment," Vunani Private Clients global market analyst Kuziva Muganiwa told the news outlet. "If a deal is not struck the US could face a downgrade and thus fall into recession."

The Wall Street Journal reported that traders around the world have been anticipating both positive and negative outcomes associated with lawmakers in Washington, D.C., coming to an agreement.

Some price fluctuations have occurred for many currencies, as the volatility associated with the fiscal cliff combined with the holiday season to create an uncertain economic picture.

"People came back from the holidays looking for trades to put back on if the U.S. fiscal cliff comes out better," Onur Sert, emerging spot trader with Standard Chartered, told the newspaper.

Category: Industry News

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