Currency Rate Alert

Monday 9th March 2020

Commentary by the E4F Dealing Desk

Global markets have descended into chaos this morning, with widespread panic selling as traders fret over the economic impact of the coronavirus and digest a free-fall in the oil prices. The rand hit its weakest levels in more than five years as it reached 16.97/$, 19.30/€ and 22.15/£ (that’s no typo).


Driving the decline was a vicious sell-off in the oil market sparked by top exporter Saudi Arabia slashing prices to unprecedented levels after a bust-up with Russia over oil production. The Middle-East producer saw its biggest cut in the last 20 years with the price of Brent crude now at 32/$ per barrel, a level last seen in 2016. The cut follows a failure by cartel OPEC and its allies to clinch a deal to cut production, which lead to the biggest one-day drop in oil since 1991.


Latest Covid-19 figures (110 000 cases, 3800 deaths) mean that global markets are still uncertain of the impact the virus will have on the global economy. The virus has been confirmed in more than 100 countries, with Italy and South Korea the worst-hit outside mainland China. More uncertainty crept into global markets as Italy confirmed more than 16 million people have been quarantined.

Where to from here?

The mass sell-off has markets drawing comparison to the 2008 global financial crisis, with the NOK at its weakest level since 1985. Gold and the Japanese Yen appear to be the winners, with the precious metal breaching $1700.00 and the JPY at its strongest level in more than four years. Focus will now shift to Central Banks in hopes of easing the outlandish sell-off that has engulfed global markets. The chaos will no doubt subside, but the question is how far will the rand go before things start heading back to ‘normal’?

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