The South African Rand made solid gains against the Pound and surged to its strongest level in three weeks against the US Dollar as the results of Wednesday’s general election draw closer and data out of China beat economist forecasts.
The Rand also found support from an increased demand for riskier assets after Russian President Vladimir Putin seemed to try and defuse the crisis in Ukraine.
Putin said that upcoming presidential elections in Ukraine were a step in the right direction and said that Russian troops massed on Ukraine’s border would be withdrawn.
The major mover for the Rand however was expectations that the nations ruling African National Congress Party will win the election convincingly.
The ANC is set to continue its 20-years in power as support for the party stood at 62.2% according to figures released by the Independent Electoral Commission.
Also offering support to the Rand was the release of better-than-expected trade data out of China. Both imports and exports increased in the world’s second largest economy easing concerns that the Chinese economy was slowing down.
Chinese exports increased by 0.9% year on year in April, defying economist forecasts for a decline of 3%.
“Emerging markets are doing very well, helped by the above news, but also, seemingly, a return of strong inflows. China’s trade data has reassured global markets yet again,” said a currency strategist at FirstRand Ltd.
The South African currency could push higher if today’s manufacturing output data comes in strongly.
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,17.5584 ,
Euro,,South African Rand,14.4154 ,
US Dollar,,South African Rand,10.3673 ,
Australian Dollar,,South African Rand,9.7290 ,
[/table]
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