During the local session the Rand strengthened against both the Pound and US Dollar as the belief that today’s US employment data will add to the case for the Federal Reserve delaying tapering until next year lent support to emerging-market currencies.
The Pound Sterling/Rand exchange rate is currently in the region of 15.8800 as of 10:45 GMT
While economists have forecast that the US added 180,000 positions in September, more than recorded for August, they are also expecting that the unemployment rate held at 7.3 per cent – above the Federal Reserve’s threshold for tapering stimulus.
Consequently, currencies which have garnered support from the inflows caused by the Fed’s accommodative policy (like the Rand) were bolstered ahead of the data’s publication.
However, according to a South African trader; ‘The Rand will take its cue from the delayed US September non-farm payrolls, which were initially due out on October 4th. Before that we expect a quiet day. The whisper is that it will be higher than expected […] If that does take place [it] should boost the Dollar and put pressure on the Rand.’
The GBP/ZAR exchange rate hit a low of 15.7485 Rand per Pound
While a notable market reaction to the report is inevitable, as RMB highlighted in its morning statement; ‘Given that the government shutdown would have impacted the data, the market will be careful to read too much into today’s reading. A significant surprise in the data will probably serve to strengthen the case for the [Fed] to only start its taper programme next year.’
Although the GBP/ZAR pairing experienced modest movement following the release of UK public finances figures (which showed that Britain’s budget deficit narrowed by more than expected) movement was minimal.
US news might be driving market movement for the rest of the day, but tomorrow’s inflation data for South Africa and the publication of minutes from the Bank of England’s latest policy meeting will influence the GBP/ZAR pairing as the week progresses.
South Africa’s mid-term policy statement, due to be delivered by Finance Minister Pravin Gordhan on Wednesday, will be another catalyst for Rand movement.
Current South African (ZAR) Exchange Rates:
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The US Dollar/South African Rand Exchange Rate is currently in the region of: 9.8010 <
The Pound Sterling/South African Rand Exchange Rate is currently in the region of: 15.8800 >
The Euro/South African Rand Exchange Rate is currently in the region of: 13.4445 >
The Australian Dollar/South African Rand Exchange Rate is currently in the region of: 9.4490 <
The New Zealand Dollar/South African Rand Exchange Rate is currently in the region of 8.3343 >
The Canadian Dollar/South African Rand Exchange Rate is currently trading in the region of 9.5058 <
(Correct as of 10:45 GMT)
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