THE rand has taken a beating in the past couple of months with unrest in the mining sector and political uncertainty weighing on the currency.
Since the start of the protests in the mining sector in February, the currency has lost 12.79% in value.
South Africa's sovereign ratings being downgraded recently by Moody's and Standard & Poor's also had an effect on the rand. The possibility of further downgrades remains.
However, the rand could soon start being influenced by international issues rather than domestic ones, according to Lynden Reabow, a foreign exchange sales trader at PSG.
"Internal factors are still dictating the direction of the currency, but when those are out of the way we will more than likely go back to being influenced by international data," he said.
It may have already happened. The Bank of Japan said earlier yesterday that it had increased its asset purchases to Ž11-trillion (R1.2-trillion). But the rand has not felt the full effect of the announcement due to the continued closure of US markets because of Hurricane Sandy.
"Domestic issues only have an impact on the rand when they have a knock-on effect on production, like the current unrest in the mining sector," Reabow said.
Over the past couple of years the local currency had mostly been influenced by data and news from the eurozone and the US. But because the rand and the local economy have not performed like other emerging markets and currencies, local issues now have an adverse effect on both.
Among 25 emerging-market currencies surveyed by Bloomberg this year, the rand was ranked the third worst, having lost 6.92% in value since the start of the year. Among major currencies, the rand was ranked as the second-worst major currency.