Rand takes a hit as America votes Trump in as president

The rand plunged against the dollar on Wednesday, as confirmation came in that Donald Trump had won the US election.

The Republican picked up a second presidential term with a victory over outgoing Vice President Kamala Harris.

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The rand fell as much as 2.5% during the day, its biggest one-day decline in more than a year.

The local currency slumped to 17.82 against the dollar in the early hours of trading, before recovering marginally.

Stephen Grootes gets comment from Matete Thulare, Head of FX Execution at Rand Merchant Bank (RMB).

It's been an interesting 24 hours says Thulare, with the dollar hitting its strongest level in a year with Trump's win.

The vote was always going to be a distraction, he adds, from an existing solid backdrop in US stocks.

"Just this week, we've learned that the US economy is still resilient, earnings growth keeps looking better and better. Despite Trump advocating for a weaker dollar, the markets believe his policies will possibly fan inflation and slow the pace of Jerome Powell (US Fed chair) cutting back interest rates and that obviously WILL boost the dollar."

Matete Thulare, Head: FX Execution - RMB

We've been driven by the main Donald Trump headline, Thulare points out, with the rand 'all over the show' since election results started trickling in from the US.

He then adds the necessary caveat.

"Make no mistake, there's still another plethora of economic data and risks coming in over the next, say 15 days, and the market will be watching for that as well."

Matete Thulare, Head: FX Execution - RMB

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