Rand on razor’s edge as South Africans vote

(Witthaya Prasongsin/Getty Images)

(Witthaya Prasongsin/Getty Images)

The rand will be one of the few South African assets trading through the country’s general election Wednesday, as investor optimism that drove a five-week rally gives way to caution over the risk of a surprise outcome.

While reliable forecasts of the results won’t be available until early Thursday, the rand could respond to this newfound nervousness after a 5.1% advance since late April that was the second-best performance in emerging markets. Options traders are already pricing in turbulence in the currency, sending its one-month implied volatility to the highest level since October. For the rand’s post-election outlook, investors may have to wait until next week as the final tally is expected only by Sunday.

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