Market analyst Andre Botha said on Wednesday that the scathing statement by ratings agency Moody's Investor Services on Eskom's bailout has caused the rand to weaken even further, trading near R15 to the dollar on Tuesday.

The local currency had already weakened to a low of R14.96 against the greenback on Monday following another escalation in the trade war between Beijing and Washington. 

Botha, senior dealer at financial services provider TreasuryONE, said the rand traded all the way down to the R14.77 level on Tuesday, as some of the risks associated with risky assets seem to dissipate as the general feeling was that the market was overextended.

Moody's released a statement on Tuesday saying that the billions of rand transferred to Eskom will not solve its financial crisis and will not stabilise the company’s debt burden.

Eskom last week reported a R20.7-billion loss for the year ended 30 March as operational and debt servicing costs keep rising. The power utility was last month allocated another R59-billion for the next two years in the special appropriations bill, but Moody's slammed this. 

"We view the additional cash transfers as credit positive, but the increased support has become necessary for Eskom to remain a going concern," Moody's said. 

"As such we consider that the government capital transfers cannot do more than stabilize the company's debt burden, pending the development of a longer-term solution for the company."

In a statement, Botha said it was plain to see that an urgent turnaround strategy was needed at Eskom and that the current pace of bleeding was not sustainable following the financials released last week.

"[Moody's] also stated that increased government support will be needed. This caused the rand to weaken to within sight of the R15.00 level against the US dollar, which fits our view that while most of the data out of South Africa is ignored currently, credit rating agencies are not one of them," Botha said.

"This morning there are some mixed signals coming from the market with the American stock indices all closing well into the green, but Asian markets closing deep in the red after the Chinese set the Yuan weaker than their weakest levels of Monday. 

"This will place the Rand in a tough place to gain any direction from the two opposing views in the market. We still feel that the market is a bit overdone but the market will probably push the Rand to R15.00."