The South African Rand has managed to recover some of its earlier losses against the Pound and US Dollar following its longest run of declines in five months after Africa’s biggest economy posted a wider-than-expected trade deficit on Thursday.
According to the South African Revenue Service, South Africa’s trade gap increased to 18.9 billion Rand in September as mining exports fell as a result of labour unrest and imports of oil increased. The figure was far wider than the 16.4 billion Rand predicted by economists.
“Running such large deficits means that the rand will remain stuck in a position of being heavily reliant on external funding for a while to come,” Tradition Analytics wrote in a briefing note.
The currency received a further hammering after a manufacturing gauge in the US exceeded expectations and as disappointing data out of South Africa’s biggest trading partner the Eurozone created speculation that the European Central Bank could cut interest rates as soon as next week.
The Rand managed to recover some of the losses it suffered against the Pound yesterday after a Purchasing Managers Index report by Kagiso Tiso Holdings advanced to 50.7 in October, higher than the 49.1 recorded in the previous month. The modest recovery came after the index fell to an 8-month low in September as a strike in the auto sector hurt new sales orders. But it still remained below the average reading of 52.7 for the third quarter of 2013, Kagiso said.
The US Dollar meanwhile edged higher as investors await the release of PMI data from the USA.
Current South African (ZAR) Exchange Rates:
The US Dollar/South African Rand Exchange Rate is currently in the region of: 10.1020
The Pound Sterling/South African Rand Exchange Rate is currently in the region of: 16.1282
The Euro/South African Rand Exchange Rate is currently in the region of: 13.6567
The Australian Dollar/South African Rand Exchange Rate is currently in the region of: 9.5775
The New Zealand Dollar/South African Rand Exchange Rate is currently in the region of 8.3584
The Canadian Dollar/South African Rand Exchange Rate is currently trading in the region of 9.7012
(Correct as of 12:00 pm GMT)
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