USD resiliance has driven the South African Rand and other emerging currencies such as the MXN, PLN and KRW to new lows on Tuesday.
The USD index which measures the greenback against a basket of currencies added 0.15% to its value overnight ahead of Chair Yellens bi-annual monetary policy testimony in front of Congress.
The underlying reason for the Rand weakness and reason for it sufferng more than its emerging market counterparts remains the political situation. The probability that local factors are starting to hurt the Rand have risen sharply in the last few weeks.
Public Protector Busisiwe Mkhwebane backed down on her proposal to have the constitutional mandate of the Reserve Bank changed. Following her comments in June, a proposal made at the ANC’s policy conference last week to nationalise the Reserve Bank. This led to the rand losing 1.44% against the dollar.