One of my recent calls has been for a weaker rand and with the recent blowout above R11/dollar many readers have emailed me asking, “Now what?” My view is that this move is a blow-off of sorts, which will possibly get worse before retreating to less scary levels below R11/ dollar, but the bigger picture remains that I am bearish on the currency for the first time in over a decade. Foreigners are exiting emerging markets (SA included) in favour of their home markets, which are offering decent returns. Coupled with weak exports, we have net selling of the rand, which is leading to the weakness. In short, the days in the sun for emerging markets are over for now; they may well return but this isn’t something that happens in a few weeks or months. Rather, this is a trend that is likely to last at least a few years. Locally, our market can hold up as most JSE-companies’ earnings come in dollars or euros, which will mean better rand-based earnings when reporting back into our currency.