Before the release of South African trade balance data, the commodity-driven currency slipped against a bullish Pound and continued to trade beyond the psychological 10 Rand per Dollar level as higher-risk assets were shunned in the face of US federal shutdown fears.
The Pound Sterling/Rand exchange rate is currently in the region of 16.2036 as of 15:10 GMT
As the Rand tracks the Euro, Italian political concerns also acted as a drag on the South African currency.
The Rand is currently stuck in its longest three-month losing streak for over ten years as Federal Reserve tapering speculation, slowing economic growth and local labour issues have caused the asset to shed 2.2 per cent against its American counterpart.
Although the Fed’s shock decision to leave stimulus unaltered at its September meeting offered the Rand a little respite, mining and automotive sector strikes have prevented the currency from making any notable gains.
As the local session progressed the Rand consolidated declines against the ‘Greenback’ and lost additional ground against a bullish Pound after the British asset was boosted by surprisingly strong UK housing data.
The GBP/ZAR exchange rate hit a high of 16.4250 Rand per Pound
Loses were compounded as trade balance data showed that South Africa’s deficit unexpectedly widened to 19.05 billion Rand in August from 14.21 billion in July.
A 7.6 per cent decline in exports and 0.1 per cent drop in imports contributed to the largest deficit for seven months.
Economists had expected the trade gap to come in at 13.9 billion Rand.
While tomorrow’s South African manufacturing figures will be of interest, much of this week’s market movement will be dictated by US budget developments and Friday’s US non-farm payrolls report.
Fluctuations in the GBP/ZAR pairing will also be inspired by UK manufacturing, construction and services PMI. If this month’s batch of UK sector data continues with the recent trend of surprising to the upside the Rand could continue softening against the Pound.
Current South African (ZAR) Exchange Rates:
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The US Dollar/South African Rand Exchange Rate is currently in the region of: 10.0545 >
The Pound Sterling/South African Rand Exchange Rate is currently in the region of: 16.2036 >
The Euro/South African Rand Exchange Rate is currently in the region of: 13.5615 >
The Australian Dollar/South African Rand Exchange Rate is currently in the region of: 9.3449 >
The New Zealand Dollar/South African Rand Exchange Rate is currently in the region of 8.2811 >
The Canadian Dollar/South African Rand Exchange Rate is currently trading in the region of 9.8020 >
(Correct as of 15:10 GMT)
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