The South Africa traded sideway, following the drop to the lowest price this year, on speculations that it fell too much and as exporters profited from the weak rand, converting their overseas earnings to the local currency.

Technical analysts say that yesterday’s huge drop made the South African currency undervalued and a bounce can be expected. Fundamentals did not change, though, and are still negative for the rand. Commodities are continuously sliding down and South Africa’s currency is heavily dependent on prices for raw materials. At present, the rand shows tendency to resume decline.

USD/ZAR traded at about 8.5540 as of 13:59 GMT today, following the earlier rise from 8.5270 to 8.5750 — the highest rate since November 24.

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