As the European session opened the Rand was trading moderately lower against a bullish US Dollar.
The American currency surged against its rivals as US jobless claims fell to a five-year low, and pushed above 100 Yen as Japanese investors snapped up foreign bonds.
At the current exchange rate 1 US Dollar will purchase 9.0296 South African Rand as of 10:00 am GMT
As the Eurozone is South Africa’s largest trading partner Euro movements also affect the Rand, so the common currency’s decline to 1.3035 was partially responsible for the Rand’s slip.
Local concerns, particularly weak mining and manufacturing figures, have also been weighing on the currency, while the recent actions taken by several central banks has increased the pressure on South Africa’s Reserve Bank to issue a rate cut.
As one South Africa-based trader comments: ‘The Rand tends to be the most volatile currency as we have a very liquid market, but for a change we ignored the gyrations amongst the other currencies. The rate cut by the Sri Lankan central bank will increase the pressure on the South African Reserve Bank to cut later this month, especially after the poor first-quarter mining and manufacturing production data released on Thursday.’
Thursday’s report showed that manufacturing production was down 2.2 per cent year-on-year.
Mining production also fell, by 3.5 per cent year-on-year. Economists had expected a gain of 4 per cent.
The figures, although worse than expected, had little impact on the market immediately following their publication.
However, RMB issued a morning comment which highlighted the key risks to the Rand in the hours ahead.
The bank stated: ‘Risk appetite is a little weaker this morning, despite the good US data. After the week-long winning streak, US equities were broken overnight. Asian equities and risk currencies are reflecting the adjustment this morning. The local focus has been on the weak manufacturing and mining data. This increases the probability of a rate cut – now our core view. The silver lining is the foreign bond buying. Local risks will increase today. Amplats seems set to announce its long-awaited and trend-setting retrenchment plan, which may trigger another bout of industrial action. […] While overall risks are high, the formal data and events calendar is pretty empty. The only focus internationally is the Group of Seven central bank and finance ministers meeting’.
That gathering will begin today and extend into the weekend.
Current South African Rand (ZAR) Exchange Rates
< Down > Up
The South African Rand/US Dollar Exchange Rate is currently in the region of: 0.1107 <
The South African Rand/Euro Exchange Rate is currently in the region of: 0.0845 <
The South African Rand/Pound Sterling Exchange Rate is currently in the region of: 0.0715 <
The South African Rand/Australian Dollar Exchange Rate is currently in the region of: 0.1100 <
The US Dollar/South African Rand Exchange Rate is currently in the region of: 9.0296 >
The Pound Sterling/South African Rand Exchange Rate is currently in the region of: 13.9689 >
The Euro/South African Rand Exchange Rate is currently in the region of: 11.7691 >
The Australian Dollar/South African Rand Exchange Rate is currently in the region of: 9.0522 <
(Correct as of 10:00 am GMT)
Comments are closed.