Having enjoyed the benefits of the commodity rally, the South African rand is starting to soften. Economists at ING expect USD/ZAR to trade around 15.50 if USD/CNH moves higher to 6.50.

Rand one of the most exposed to higher US yields

“As a high beta emerging market currency, it will be one of the most exposed to higher US yields. But it is also one of the most highly correlated currencies with the Chinese renminbi.”

“Were USD/CNH to start trading up to the 6.50 area, we could see USD/ZAR trading to 15.50.”