Amidst an economic recession, high unemployment, political uncertainty and credit rating downgrades; the Rand to continued its recent counterintuitive behaviour by producing surprising strength early last week.
Last week was characterised by the student protests across the nation. The Rand was at a low against the dollar as the student protests over tuition fees put a negative spin on investor sentiment. The Rand fell by nearly 2% against the US dollar mid-week, which tied in with the protests occurring outside of Parliament.
The South African Rand fell to historic lows against the Pound last week, hitting 21.45 on Thursday, the worst rate in over 10 years. Following hawkish statements from various Fed officials with regard to raising US interest rates this year, the Rand also reached record lows against the US Dollar.
The big talking point of the last week was the devaluation of the China’s currency. The Rand dropped to its lowest level (R12.7250) in 14 years to the Dollar on Tuesday and Wednesday. This decline, along with fellow emerging market units, followed China’s decision to devalue its currency to support a stuttering economy and boost exports. The USD strengthened on the back of this devaluation.
Last week we saw the vulnerable Rand under pressure against the Dollar and the Pound. As China is a key importer of local commodities in South Africa, the release of weak manufacturing data out of China put the Rand under pressure on Monday.
Last week, the South African Rand took the brunt of a sell-off in commodity currencies triggered by concerns about a slowdown in China’s growth. The Rand dropped more than 1.5% to a low of 12.680 to the Dollar. On Friday, the Rand temporarily hit a 14-year low at its weakest point.
Last week Tuesday, Overberg Asset Management’s weekly overview of the South African market landscape named the country as one of the most threatened emerging markets. South Africa, Brazil and Turkey were deemed the “threatened three” due to displaying the weakest currency fundamentals.
The South African Rand has broken barriers unseen in recent years as it reached R18.50 to the British Pound last week. While the currency has taken a significant beating since May last year, when the US Federal Reserve first announced plans to taper its quantitative easing programme, last week’s woes can be attributed to renewed […]
South Africa exported R770 million (USD 72 million) more in value than it imported in the second-last month of 2013
Fitch Ratings, one of the world’s largest credit ratings agencies, kept South Africa’s rating steady this week despite ongoing concern about the economy’s failure to grow – and, in particular, to grow in a way that creates jobs
South Africans’ penchant for importing more than they sell to the world, as well as bleak news from the United States, has been the cause of a dramatic dip in the value of the Rand. The national currency continued its headlong dive to the region of R10.53 to the US Dollar
The prediction at the start of the week was for the Rand to remain range-bound as long as the Democrats and the Republicans remained deadlocked over the US budget
The Rand has continually weakened against the Dollar and the expected US data being released throughout this week may have a stronger impact on the Rand and cause it to weaken further
The South African Rand has shown its tendency to be one of the most volatile currencies starting the week just below R9.80 to the Dollar and getting as low as R14.92 to the British Pound.
South African inflation unexpectedly slowed in June as the Rand rebounded from a four-year low. The inflation rate declined to 5.5 percent in June from 5.6 percent in May. The Reserve Bank held the repurchase rate at 5 percent for the sixth time in a meeting last week.
The South African Rand was the top gainer this week among emerging-market currencies, as it caught up with gains seen in other asset classes earlier in the week. The Rand started the week at 9.98 to the US Dollar and 15.08 to the British pound, coming to rest at 9.86 and 15.06 respectively.
Although there was a great deal of worry about this last week, other factors that might contribute to the stabilisation of the Rand, is a consolidation in commodity markets like gold and platinum and the news that China was set to achieve growth of 7% for 2013.