We had some sizeable moves in the early opening trade today in Australia and New Zealand

None more sizeable than the South African rand:

  • Currency moves already impacting right at the start of the trading week
  • Cable lower too, but ZAR (South African Rand) the biggest loser

Its gained back a good chunk of the earlier losses:

The search for the 'why' of the move continues.

Via Bloomberg comes this:

  • The move initially had traders scratching their heads about whether it was a lack of liquidity early in Asia or investors dumping assets tied to Chinese growth
  • The rand ... has been hurt by a slump in commodity prices, lackluster economic growth and rising U.S. interest rates
  • "The huge spike in risk aversion last week, poor liquidity and position liquidation have hit the rand this morning" said Robert Rennie, the global head of currency and commodity strategy at Westpac
  • Losses in the rand accelerated in December after President Jacob Zuma unexpectedly fired his finance minister only to alter the decision days later
  • The tumultuous start to the year in China has further damaged sentiment
  • "The recent market turmoil has pushed volumes up and made carry trades less attractive," said Nizam Idris, head of foreign-exchange and fixed-income strategy at Macquarie Bank Ltd. in Singapore. "I don't think it was driven by any fundamental arguments" and carry trades funded by the Japan's yen had been taken out, he said.

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On the first point made above ... I'd add a stop loss run in USD/ZAR. I've read some attributions for the move due to closing of margin trades. Yes, stops. And, its not one thing OR another, its a combination ... try to think AND, not OR.

The rest of the reasons .... there is nothing new there - none of these factors were new this morning. As the commentators have rightly pointed out.

So, why this morning? Maybe that's the wrong question. We can't know everything that's happening in a market, nor with order boards. Anyone who has all the answers, all the time, I'd be suspicious of. The factors were in place, the trend continued. It happens.