As trade began on Wednesday the Rand was little changed from levels recorded overnight. The commodity-driven currency was briefly able to consolidate gains against the US Dollar ahead of Fed Chairman Ben Bernanke’s speech, and advanced on a broadly softening Pound prior to the publication of minutes from the latest Bank of England policy meeting.
At the current exchange rate 1 Pound will purchase 15.1005 South African Rand as of 12:25 GMT
According to local traders the Rand benefited from a quiet news day yesterday. One local forex trader observed: ‘We have had a surfeit of bad news since August last year, so when things are quiet, then the Rand gains.’
However, as the European session got underway the Rand faltered, slipping against strengthening Sterling.
The Pound was boosted by the news that the Monetary Policy Committee was united in its view of maintaining the current level of asset purchases when it met earlier this month.
The GBP/ZAR exchange rate hit a high of 15.1765 Rand per Pound
Losses were also posted against the US Dollar as emerging-market assets were knocked by speculation surrounding Bernanke’s testimony. As one industry expert noted: ‘Any comments coming from Bernanke at this point is big news for investors. The release of better-than-expected Chinese data and the government’s support for the country’s economic growth will most likely give a boost to investors.’
But the Rand could recoup losses in the hours ahead as a result of better than forecast domestic retail sales data.
Although economists expected that the nation’s retail sales would gain by 2.4 per cent in May year-on-year following April’s 2 per cent increase, retail sales were actually up by 6.2 per cent on the year. Month-on-month retail sales climbed 2.2 per cent in May following a revised decline of 0.4 per cent in April. The forecast was for a 0.2 per cent month-on-month advance.
Of course, if today’s US housing starts figures show a second month of improvement, and Ben Bernanke is less dovish about reining in easing then he was earlier this month, the odds of the Fed tapering stimulus in September will rise and commodity-driven currencies like the Rand could fall.
Current South African (ZAR) Exchange Rates
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The US Dollar/South African Rand Exchange Rate is currently in the region of: 9.9242 >
The Pound Sterling/South African Rand Exchange Rate is currently in the region of: 15.1005 >
The Euro/South African Rand Exchange Rate is currently in the region of: 13.0615 >
The Australian Dollar/South African Rand Exchange Rate is currently in the region of: 9.0329 >
The New Zealand Dollar/South African Rand Exchange Rate is currently in the region of 7.7279 <
The Canadian Dollar/South African Rand Exchange Rate is currently trading in the region of 9.4925 >
(Correct as of 12:25 GMT)
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