In the week before last, the Rand strengthened against the US Dollar for the third consecutive day on Friday, closing at USD-ZAR 10.93, compared with Thursday’s close of USD-ZAR 10.98. Rand appreciation against the greenback occurred into Dollar but weakness against all of the major crosses and into a mixed to stronger performance from the commodity and from EM currencies we monitor for purposes of this report.
The Dollar weakened 0.4 percent against all major crosses, with the biggest move seen against the Pound.
The Rand was the best performer in the commodity currencies category and the second-best performer in the EM currency category (beaten only by the BRL).
On Monday Rand weakened slightly against the US Dollar. Rand depreciation against the greenback occurred despite Dollar weakness against all of the major crosses, but was consistent with a mostly weaker performance from the EM currencies we monitor for purposes of this report. The weaknesses were reversed on Tuesday as Rand appreciation against the greenback occurred into a mixed to weaker performance from the Dollar against the major crosses and into signs of uneven growth in the US in data published. The Rand was the best-performing currency in both the commodity and EM currency categories.
Through Wednesday the ZAR remained steady before weakening overnight as the US Fed announced that is stopping quantitative easing and expressing their confidence in the US recovery. Small gains were made on Friday when it was announced that our trade deficit has narrowed – this caused the ZAR to strengthen slightly. Unfortunately these gains were short lived as emerging market currencies were sold off globally. The Rand was pushed over the R11.00 against the USD once again and weakened over 1.5 percent in the afternoon’s trade.
The focus this week shifts to Europe as the ECB is set to make its latest policy announcement on Thursday; on Friday we also see payroll data released in the US. The in-house Sangoma expects the ZAR to keep fighting, but more than likely remain weak throughout the week.
As of Monday morning the ZAR is trading at:
GBPZAR @ 17.68; USDZAR @ 11.058; EURZAR @ 13.816; AUDZAR @ 9.677.