Yesterday’s shocking manufacturing data for South Africa sent the Rand reeling during the local session, and the commodity-driven asset still hasn’t managed to right itself.
The Pound Sterling/Rand exchange rate is currently in the region of 16.3648 as of 11:30 GMT
While economists expected South Africa’s gauge of manufacturing to show expansion, it actually dropped below 50 and into contraction territory for the first time in six months.
With the manufacturing PMI slumping to an eight-month low of 49.1, economist Jana le Roux commented; ‘the September PMI will raise fresh concerns at the Reserve Bank with regard to the domestic economic outlook. The growth-verses-inflation dilemma is expected to continue and indictors are increasingly pointing to a stagflationary (slow inflation/growth) environment’.
The GBP/ZAR exchange rate hit a high of 16.4751 Rand per Pound
Other factors negatively impacting the Rand include the risk-aversion inspired by the political uncertainty in the US, fluctuating gold prices and the expectation that Friday’s US non-farm payrolls data will show improvement in the labour market.
According to RBM; ‘The Rand has finally succumbed to all the negatives but shows no sign of weakening significantly. For now, the markets are taking [the US shutdown] in stride. Some support has come from the view that the shutdown will delay Fed tapering further.’
As the Rand tracks the Euro, Italy’s political dramas and the imminent European Central Bank policy meeting also played a part in the South African asset’s weakness, while declines against the Pound were consolidated following the release of UK construction news.
Today’s US ISM manufacturing data could trigger further market movement as the day continues.
Current South African (ZAR) Exchange Rates:
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The US Dollar/South African Rand Exchange Rate is currently in the region of: 10.1080 <
The Pound Sterling/South African Rand Exchange Rate is currently in the region of: 16.3648 >
The Euro/South African Rand Exchange Rate is currently in the region of: 13.6832 >
The Australian Dollar/South African Rand Exchange Rate is currently in the region of: 9.4683 <
The New Zealand Dollar/South African Rand Exchange Rate is currently in the region of 8.3220 <
The Canadian Dollar/South African Rand Exchange Rate is currently trading in the region of 9.7789 >
(Correct as of 11:30 GMT)
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