Overnight the commodity-driven Rand advanced on peers like the Pound and US Dollar as global trade prospects improved following the release of better-than-forecast retail sales and industrial production data for China.
At the current exchange rate 1 Pound will purchase 15.7199 South African Rand as of 11:15 GMT
Since Friday the Rand has strengthened against several of its rivals as the odds of the Federal Reserve tapering stimulus this month fell in the wake of below-estimate US employment figures.
News that Chinese industrial production surged by 10.4 per cent in August year-on-year helped the Rand extend its advance during Asian trading.
However, less-than-impressive domestic data saw the Rand reverse these gains during the local session.
The Rand fell from a month-high against the US Dollar and lost ground against Sterling as a report issued by the Reserve Bank of South Africa showed that the nation’s current-account gap increased by more than forecast.
In a statement issued with the figures the central bank commented: ‘South African exporters did not benefit notably from the somewhat more favourable global economic environment. Manufacturing export quantities contracted in the second quarter of 2013, while mining and agricultural export volumes edged higher over the same period. A marked decline was recorded in the subcategory for vehicles and transport equipment.’
Although economists expected the deficit to widen to 6.2 per cent of GDP in the second quarter from 5.8 per cent in the first, it actually swelled to 6.5 per cent of GDP.
The GBP/ZAR exchange rate hit a high of 15.7643 Rand per Pound
The surprising result prompted this response from one London-based industry expert; ‘Significant risks remain in place. South Africa’s negative output gap remains in place, and is unlikely to dissipate soon.’
If tomorrow’s UK employment report continues the recent trend seen in UK data and surprises to the upside the Rand could dip further against its British counterpart.
Tomorrow’s domestic manufacturing data could also inspire significant Rand movement.
Current South African (ZAR) Exchange Rates:
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The US Dollar/South African Rand Exchange Rate is currently in the region of: 9.9753 >
The Pound Sterling/South African Rand Exchange Rate is currently in the region of: 15.7199 >
The Euro/South African Rand Exchange Rate is currently in the region of: 13.2471 >
The Australian Dollar/South African Rand Exchange Rate is currently in the region of: 9.2037 >
The New Zealand Dollar/South African Rand Exchange Rate is currently in the region of 8.0274 >
The Canadian Dollar/South African Rand Exchange Rate is currently trading in the region of 9.6258 >
(Correct as of 11:15 GMT)
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