The South African Rand has softened against the Pound and US Dollar after Africa’s largest economy posted disappointing consumer confidence data.
According to the Bureau for Economic Research, consumer confidence in the South African economy decreased to -8 in the third quarter of 2013, a sharp fall from the reading of 1 recorded in the second quarter of the year.
The Bureau’s Consumer Confidence Index covers 2,500 households in metropolitan areas, cities, towns and villages across the country with the survey being made from personal at-home interviews and assesses general economic outlook, a household’s economic condition and major spending purposes. The indicator varies on a scale of -100 to 100; a value of -100 indicates extreme lack of confidence, 0 means neutrality and 100 equals extreme confidence. Economists had been forecasting Wednesday’s result to come in at -2.41.
Earlier in the session the Rand had been holding steady against its peers but the market had been predicting the currency would weaken throughout the day regardless as a result of upcoming data out of the US. The US data includes the latest new home sales and durable goods orders. If both come in stronger than expected then the Rand is likely to weaken further as a result.
“We believe that the rand remains vulnerable over the coming months, mainly because Fed tapering has merely been delayed and South Africa’s fundamental landscape is likely to have deteriorated further by the time Fed actually starts tapering,” Absa Capital analysts wrote in a note.
The South African economy remains under pressure due to its widening current account and increasing budget deficit.
Current South African (ZAR) Exchange Rates:
The US Dollar/South African Rand Exchange Rate is currently in the region of: 9.8600
The Pound Sterling/South African Rand Exchange Rate is currently in the region of: 15.7754
The Euro/South African Rand Exchange Rate is currently in the region of: 13.3002
The Australian Dollar/South African Rand Exchange Rate is currently in the region of: 9.2106
The New Zealand Dollar/South African Rand Exchange Rate is currently in the region of 8.1143
The Canadian Dollar/South African Rand Exchange Rate is currently trading in the region of 9.5595
(Correct as of 11:35 am GMT)
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