The Rand began trade yesterday slightly stronger, but quickly weakened following the release of disappointing South African PMI data. The currency remains weaker today, but is unlikely to experience notable additional movement in the hours ahead.
At the current exchange rate 1 US Dollar will purchase 9.2151 South African Rand as of 10:00 am GMT
After the PMI data was published, revealing a concerning slide from 53.6 to 49.3 last month, the Rand dipped.
As forex expert William Van Rijn noted: ‘The Rand was quite resilient [Tuesday] morning given where we were trading last week. Post PMI the Rand was on the back foot and we’ve seen demand for the Dollar across the board and very little supply. The market got a little bit ahead of itself on Thursday and I think people were hoping for better PMI figures today.’
According to analysts the US Dollar/Rand exchange rate opened at 9.25 Rand today, well within the range of 9.17-9.30 Rand.
An absence of South African news and subdued movement in the markets ahead of tomorrow’s influential central bank policy meetings means that pressure on the Rand will be limited today.
Significant volatility can be expected tomorrow for, as RMB analysts stated, ‘By the time we come in tomorrow we should know that result of the Bank of Japan meeting, the first under the new governor and under the aggressive new inflation targeting regime. Risk falls mostly on the Yen but we could see some spill over into risky assets. Later tomorrow we will receive the ECB policy decision and on Friday the all-important US non-farm payrolls data’.
While markets may have calmed this week following the chaos triggered by the situation in Cyprus, tomorrow could see significant movement return.
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