By Paul Wallace
(Bloomberg) — The fortunes of the South African rand have swung so much that it’s gone from being the best carry-trade to the worst this year.
Barring a few days in early January, the rand’s year-to-date carry return against the dollar turned negative for the first time in 2017, and is the only currency among 16 major peers to have handed carry traders a loss on a year-to-date basis through Nov. 13.
Back in late March, it was a different story. The dollar-rand carry trade was up 12 percent. It began to lose its sparkle once investors suspected South African President Jacob Zuma would fire his fiscally conservative Finance Minister Pravin Gordhan, which he did.
The currency’s woes have since mounted, with Zuma lurching from one political crisis to another and the economy faltering. The rand has fallen 5.3 percent this year to 14.5086 per dollar on Tuesday, the weakest level since September 2016.
