The South African Rand climbed to a 12-week high against the Pound earlier on Tuesday after the UK currency suffered a knock from weaker than expected manufacturing PMI data, against the US Dollar the currency was hovering close to a three month high.
The Rand strengthened yesterday as market sentiment towards riskier assts continued to improve with an easing of tensions over the situation in Ukraine.
“The Rand continues to push steadily stronger as sentiment towards emerging markets revives,” said Rand Merchant Bank currency analyst John Cairns.
The currency also found support from comments made by Federal Reserve Chariman Janet Yellen who suggested that due to a run of weaker than expected data releases, monetary easing could be place for a longer period than expected to support the world’s largest economy. The Feds quantitative easing programme has seen billions of Dollars injected into riskier, higher yielding currencies such as the Rand.
Yesterday saw the Rand surge to highs after the release of trade surplus data which took economists by surprise. The data showed that South Africa posted a surplus of R1.72 billion in February, revering the deficit seen in January and smashing forecasts for a deficit of R3 billion. Stronger-than-expected domestic credit figures also benefitted the currency.
“The trade balance came out positive, exporting is robust and it is going to outpace import growth, it really shows that the trade balance figure has the potential to improve,” said a forex strategist at HSBC.
The Rand could see further movement tomorrow when the latest consumer confidence data is released. GDP data out of the Eurozone and factory orders data out of the USA are also likely to affect the currency.
South African Rand (ZAR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,South African Rand,17.6580 ,
Euro,,South African Rand,14.5426 ,
US Dollar,,South African Rand,10.5875 ,
Australian Dollar,,South African Rand,9.7840 ,
[/table]
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