Bearish Rand Bets Climb to 10-Month High on Strikes, Debt
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Traders are more bearish on the rand than at any time in the past 10 months as debt crises in Europe and the U.S. sap demand for higher-yielding assets and a strike by South African fuel workers threatens economic growth.
The extra cost of contracts granting the right to sell the rand rather than buy it has increased by as much as 98.75 basis points, or 0.9875 percentage point, since July 6 to 312.5 basis points, based on the currency’s one-month risk-reversal rate on July 18. Expectations of swings in the rand have risen the most among emerging-market currencies in the past five days, according to contracts measuring implied volatility.