The South African Rand is trading softer against the Pound and US Dollar as positive Consumer Price Index data bolstered Sterling and as optimism that a deal is close to being made regarding the US debt ceiling lent support to the ‘Greenback’.
Also weighing upon the Rand was the news that the value of Gold, (one of South Africa’s major exports), dropped to a three-month low as optimism grew that US senate leaders will agree to a deal to reopen the US government and raise the debt ceiling. The value of silver also fell.
“Markets generally still believe that an extension to the debt ceiling, or at least a resolution that buys more time, is highly likely. It may be that markets have underestimated the risks of a US default, but unless there is a realistic prospect that bills will not be honoured, it seems that gold is likely to remain within its downward trend,” said an analyst at Credit Suisse Group AG.
The Rand is at the mercy of international factors today due to the lack of domestic economic news in South Africa.
“Developments out of the US are still driving the markets and as reports circulated overnight that the US Senate is near a deal to raise the debt ceiling … the Dollar opened the day slightly stronger,” Standard Bank trader Jan de Fouw said in a market note.
Hopes that a deal to raise the debt ceiling and reopen the US government increased after Democrat Harry Reid and Republican Mitch McConnell ended a day of talks with positive rhetoric. Their comments boosted hopes that a deal will be reached and the debt ceiling raised before the 17th of October deadline.
Wednesday sees the release of the latest South African retail sales data which is expected to show an improvement year on year but a slight decline in monthly sales. A worse-than-expected figure will likely send the Rand down further against Sterling and other currencies.
Current South African (ZAR) Exchange Rates:
The US Dollar/South African Rand Exchange Rate is currently in the region of: 9.8943 <
The Pound Sterling/South African Rand Exchange Rate is currently in the region of: 15.8332 <
The Euro/South African Rand Exchange Rate is currently in the region of: 13.4186 >
The Australian Dollar/South African Rand Exchange Rate is currently in the region of: 9.4458 >
The New Zealand Dollar/South African Rand Exchange Rate is currently in the region of 8.3108 >
The Canadian Dollar/South African Rand Exchange Rate is currently trading in the region of 9.5690 >
(Correct as of 12:40 pm GMT)
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