The Rand managed to recover slightly on Friday pulling away from yesterday’s four year low as positive production data saw investor confidence improve.
The data showed that manufacturing, boosted by a weaker Rand, may be on the verge of making a recovery, whilst mining production rose for the first time in five months. The mining sector is vital to South Africa’s economy as it accounts for more than half of the nation’s annual exports.
“Mining is a key foreign-exchange earner, and if mining output can continue to pick up from here, it should be supportive of the rand,” said Jana le Roux, an economist at ETM Analytics. ETM predicts that the Rand could rebound to around 9.10 per Dollar before the end of Friday.
The currency is also being supported by rises in the price of raw materials and the reversal in Dollar gains. According to the Standard & Poor’s GSCI index of raw materials the value of Platinum and copper rallied. Mining commodities account for 53 percent of South Africa’s exports, according to government data for 2012.
“A reversal in dollar gains has brought some relief to USD/ZAR,” said John Cairns of Rand Merchant Bank.”US data out this afternoon creates some risks but there’s no reason to think the market will close the week much changed from current levels, even if we see a wide range on the day.”
Despite the slight recovery the Rand remains under heavy pressure from concerns over the nation’s large trade and current account deficits as well as ongoing concerns over the stability of the labour market.
Current ZAR Exchange Rates
The South African Rand to Euro exchange rate is currently trading at 0.0833
The South African Rand to US Dollar exchange rate is currently trading at 0.1088
The South African Rand to Pound Sterling exchange rate is currently trading at 0.0718
These exchange rates were correct as of 11:40am GMT
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