South African Rand Declines for Second Week

South African rand has fallen this week losing almost 2% against the U.S. dollar compared to its last Friday’s close rate. It was the second straight loss week for USD/ZAR as the Forex traders were leaving carry trade positions before the holidays period uncertainty and on the bad political background in South Africa.
Jacob Zuma, accused in a corruption case two years ago, was elected as the head of the African National Congress (ANC) on December 18. ANC is the ruling and most influential party in the Republic of South Africa; this makes Zuma the most probable next president of the republic after the current President Thabo Mbeki leaves the position in 2009.
Investors view Jacob Zuma as potentially dangerous president candidate because of his involvement in the corruption scandal and his connections with pro-welfare parties. Markets also react on his support by the South Africa communists, which may lead to the nationalization of some of the largest country’s companies.
South African rand reacted with falling against almost all major world currencies, especially against U.S. dolla. USD/ZAR has fall en from 6.8888 down to 7.0243. That’s the sixth weekly decline in the past two months, forming an uptrend channel since the end of October 2007.

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