The South African Rand has weakened against the US Dollar due to softening precious metal prices erasing the gains made earlier in the week.
On Tuesday the Rand made gains against the US Dollar after South Africa’s trade deficit narrowed more than expected in March. The currency then retreated as commodity prices fell as fears over the world’s growth outlook sent investors to bonds and safer-havens.
The price of Gold, crude oil and other commodities fell sharply on Wednesday after Chinese data showed a surprise drop in manufacturing orders in April and a slowdown in US manufacturing growth. A decline in the number of newly created jobs in the US added to the revival of fears for the health of the global economy.
Despite a smaller March trade deficit, the current account deficit for the first quarter will still be large, analysts at Absa Capital wrote in a research note.
“The Q1 deficit is still 10 billion rand larger than in Q3 2012 when the current account deficit hit a peak of 6.8 percent of GDP,” they wrote.
“We still argue that the rand remains vulnerable to the country’s twin deficits and that over the medium term, participants should continue to fade rand rallies.”
The Rand could weaken further over the course of the day as European PMI data and the European Central Banks interest rate decision affects the market. If the latest US jobless data comes in worse-than-expected than the Rand will slip further against the ‘Greenback’.
Current South African Rand (ZAR) Exchange Rates
The South African Rand/US Dollar Exchange Rate is currently in the region of: 0.1105
The South African Rand/Euro Exchange Rate is currently in the region of: 0.0839
The South African Rand/Pound Sterling Exchange Rate is currently in the region of: 0.0710
The South African Rand/Australian Dollar Exchange Rate is currently in the region of: 0.1081
The US Dollar/South African Rand Exchange Rate is currently in the region of: 9.0471
The Pound Sterling/South African Rand Exchange Rate is currently in the region of: 14.0796
The Euro/South African Rand Exchange Rate is currently in the region of: 11.9141
The Australian Dollar/South African Rand Exchange Rate is currently in the region of: 9.2508
The Canadian Dollar/South African Rand Exchange Rate is currently in the region of: 8.9701
(Correct as if 10:25 am GMT)
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