A steady Rand became a slightly shaky Rand as trade progressed on Wednesday and South African economic reports delivered mixed results.
The Pound Sterling/Rand exchange rate is currently in the region of 15.6664 as of 12:50 GMT
After dipping against peers like the US Dollar yesterday the Rand began local trade trading in a tight range, and with the biggest driver of currency market direction this week being today’s Federal Open Market Committee announcement, a local trader stated: ‘Expect a bland, do-nothing day. Even though locally we have consumer inflation data […] and retail sales data.’
As the European session got underway the Rand weakened slightly against a rallying Pound as encouraging minutes from the Bank of England boosted the appeal of the British asset.
Further fluctuations occurred as local consumer price data saw South African inflation accelerate for a second month, achieving 6.4 per cent and a four-year high in August.
Month-on-Month inflation advanced 0.3 per cent.
Inflation has been higher than the Reserve Bank of South Africa’s target of 3-6 per cent since July.
The data prompted this response from economists with Absa capital; ‘The recent acceleration in headline inflation has been driven by cost-push factors related to the Rand weakness, mainly through fuel prices.
The GBP/ZAR exchange rate hit a low of 15.4950 Rand per Pound
The Rand consolidated declines as South African retail sales were shown to have risen by less-than-expected in August.
Although sales advanced by 2.8 per cent last month, up from a negatively revised gain of 1.4 per cent in July, economists forecast an increase of 4.5 per cent.
With the FOMC delivering an easing-focused statement in just a few hours time, and the Reserve Bank of South Africa’s interest rate decision coming up tomorrow, the Rand is still under pressure.
According to Absa capital, ‘we think the Rand is vulnerable to renewed weakness in both the short and medium term, and continue to recommend fading the recent rally.’
Current South African (ZAR) Exchange Rates:
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The US Dollar/South African Rand Exchange Rate is currently in the region of: 9.8324 >
The Pound Sterling/South African Rand Exchange Rate is currently in the region of: 15.6664 >
The Euro/South African Rand Exchange Rate is currently in the region of: 13.1343 >
The Australian Dollar/South African Rand Exchange Rate is currently in the region of: 9.1704 >
The New Zealand Dollar/South African Rand Exchange Rate is currently in the region of 8.0558 >
The Canadian Dollar/South African Rand Exchange Rate is currently trading in the region of 9.5354 >
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