Losses of the monetary unit of the largest economy on the African continent are linked with the Federal Open Market Committee of the U.S. Federal Reserve declining to employ a third round of quantitative easing during its meeting on Tuesday. The policy-making arm of the Fed noted development and growth within the globe's largest economic system are at an acceptable pace.
"USD/ZAR is being pulled in two directions: the great risk environment versus the stronger U.S. dollar," states a client note penned by Rand Merchant Bank on Wednesday, according to Reuters. "Over time we still believe it will be the better risk environment that will come to dominate, but we look set to open the local trading session around the middle of yesterday's range."
The rand also lost value against the dollar amid concerns the South African Reserve Bank is committing more resources to acquiring U.S. dollars in the foreign-market exchange, according to a note penned by ETM analytics economists of Johannesburg and cited by Bloomberg.
The rand is likely to continue its bearish performance after the country releases retail sales data that economists project to indicate slowing growth, according to Reuters.