The South African Rand has strengthened against the Pound and has edged higher against the US Dollar following yesterday’s better-than-expected manufacturing data out of South Africa.
Traders are being cautious however as they await the release of the latest US labour data due on Friday and are taking and see approach as they wait for a number of interest rate decisions due to be made by several Central Banks.
Monday’s solid manufacturing data helped keep the Rand steady and allowed it to remain firmer than the psychologically important R10 to the Dollar mark. South Africa’s Purchasing Manufacturers Index increased in June, staying above the 50 point mark for the third consecutive month as signs of recovery in the USA and Europe aided exports and demand for goods.
The next big mover for the Rand is likely to occur on Friday when the latest US non-farm payrolls data is released. According to economists the data is expected to show a fall from the 175,000 seen in April to 165,000 in June.
A better-than-expected figure is likely to weigh upon the Rand as speculation will mount that the US Federal Reserve will ease its quantitative easing programme sooner rather than later, a move that will weaken emerging market currencies.
The European Central Bank and Bank of England will also announce their interest rate decisions on Thursday.
“We still think that the Rand is unlikely to strengthen beyond R9.80/Dollar, but much will depend on this week’s US labour data, which will be critical to expectations about the Fed’s start of ‘tapering’… and, hence, for global investor attitudes to risky assets like the Rand,” Absa Capital wrote in a note.
Current South African Rand (ZAR) Exchange Rates
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The US Dollar/South African Rand Exchange Rate is currently in the region of: 9.9100 >
The Pound Sterling/South African Rand Exchange Rate is currently in the region of: 15.0112 >
The Euro/South African Rand Exchange Rate is currently in the region of: 12.8840 <
The Australian Dollar/South African Rand Exchange Rate is currently in the region of: 9.0669
The Canadian Dollar/South African Rand Exchange Rate is currently trading in the region of 9.3818 <
(Correct as of 14:30 pm GMT)
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