The Rand hit a fresh four-year low against the US Dollar today and was little changed following the publication of stronger than expected domestic industrial production data.
At the current exchange rate 1 US Dollar will purchase 10.3300 South African Rand as of 12:35 GMT
Prior to the release of the industrial production report the Rand, which opened the European session trading within touching distance of the over four-year low achieved at the close of May, dropped to 10.3600 Rand per Dollar.
As local currency strategist Bruce Donald explained, several factors were wearing on the Rand: ‘The recent data out of China has not been encouraging. Ongoing labour unrest and the associated risks of production disruptions in key export sectors and concerns around electricity supply also haven’t helped matters […] Our analysis suggests that the Rand’s relationship with emerging market currencies has been stronger over the past month compared to its relationship with other international financial market variables.’
Rand dropped to 10.3600
Similarly RMB market analyst John Cairns commented: ‘US debt continues to attract flows at the expense of emerging markets. All EM bonds are being sold aggressively. South Africa is no exception. Local issues only add to the pressure.’
Yesterday the US had its credit rating outlook upgraded from negative to stable by top agency Standard and Poor, resulting in a sell-off of emerging market currencies.
However, while local concerns have dragged the currency down there was some positive South African news today as manufacturing production in the nation increased at a faster pace in April.
Year-on-Year industrial production rose by 7 per cent in April, significantly more than the 3.5 per cent increase forecast by economists and a rebound from March’s 2.2 per cent decline.
The more rapid growth was primarily a reflection of an 18 per cent gain in the production of motor vehicles.
After the figures were published the Rand was trading in the region of 10.3080 against the US Dollar
Tomorrow’s South African retail sales data could also trigger Rand movement.
Current South African (ZAR) Exchange Rates
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The US Dollar/South African Rand Exchange Rate is currently in the region of: 10.3300 >
The Pound Sterling/South African Rand Exchange Rate is currently in the region of: 16.0502 >
The Euro/South African Rand Exchange Rate is currently in the region of: 13.6870 >
The Australian Dollar/South African Rand Exchange Rate is currently in the region of: 9.5698 <
The New Zealand Dollar/South African Rand Exchange Rate is currently in the region of 7.9881 >
The Canadian Dollar/South African Rand Exchange Rate is currently trading in the region of 9.9342 <
(Correct as of 12:35 GMT)
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