The Rand might have fought back against the US Dollar on Friday as lacklustre US employment figures dented Fed tapering prospects, but the South African currency remained lower against the Pound as trading began for another week.
During the local session the Rand was feeling the pressure ahead of the publication of domestic mining production figures.
Tomorrow’s mining report is expected to show a slowing in output in the latest in a stream of signs that South Africa’s economy is struggling.
Economists have forecast that mining output rose by 7.1 per cent in November, a serious step down from the increase of 22 per cent recorded in October.
Although the Rand has dropped by almost 20 per cent in the last 12 months, South Africa’s export industry has so far failed to see any notable benefit. As mining production accounts for over half of the nation’s exports tomorrow’s figures are particularly significant.
According to a Johannesburg-based global markets researcher; ‘We are waiting for the local data to provide us with evidence of a positive reaction from the economy to the improvement in domestic competitiveness. The evidence has been somewhat disappointing so far.’
The Pound, meanwhile, began the week supported by the expectation that this week’s UK retail sales report will show a gain in sales.
Month-on-month retail sales are expected to gain by 0.3 per cent in December following an increase of 0.4 per cent in November.
Separate UK data is forecast to reveal that consumer prices rose by 0.5 per cent in the final month of 2013 following a 0.1 per cent increase in November.
US developments could also impact the Rand over the next few days.
Given that Friday’s surprising US non-farm payrolls report dented expectations for tapering to continue over the next few months, US data will be of particular interest.
Positive data could see the ‘Greenback’ recover its strength before this month’s Federal Open Market Committee policy meeting.
Current South African (ZAR) Exchange Rates:
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,South African Rand,17.5902 ,
Euro,,South African Rand,1.2067 ,
US Dollar,,South African Rand,10.7115 ,
Australian Dollar,,South African Rand,9.5299 ,
New Zealand Dollar,,South African Rand,8.9123 ,
Canadian Dollar,,South African Rand,9.8241 ,
[/table]
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