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The rand has weakened on growing market unease following the US elections that saw incumbent President Donald Trump prematurely and incorrectly claiming victory in the early hours of the morning. It was threatening to breach the R16/$ on Tuesday for the first time since March on hopes that the Democrats will triumph over the Republicans.
But overnight, the rand retreated as Trump and his democratic adversary Joe Biden were neck and neck at the polls. The local currency was trading at R16.28/$ at 11:57 am, having weakened as much as 2.04%.
Matete Thulare an analyst at Rand Merchant Bank said the rand weakening is testament to the volatility that is currently faced by the market.
"As the market we are really just anxiously waiting as nothing is really certain at the moment. Trump threatening to go to court isn't really helpful either. That is why even the commodities are fluctuating," he said.
Thulare said the market was readying itself "...for a long wait for the results, meaning we can anticipate even more volatility."
Andre Botha Senior Dealer at TreasuryONE said anything is possible in the US election.
"The key swing states will give the final winner to see who gets to the key 270 electoral votes first. It is going to most probably come down to who wins Pennsylvania to determine the winner of the election.
"If the US election does not get a clear winner and becomes contested, then we can be in for a rough ride, and the topside of the wedge can be tested," he said in a note.
The JSE all share opened weaker by 0.34% to 53,006.44 points but has gained momentum and firmed 0.89% to 53,683.42 points.
Economist have said that if former-Deputy President Joe Biden wins the markets will probably have a short term negative reaction because he is less business friendly, however, South Africa would benefit from the economic stability of the US.
