South Africa may have published some less-than-impressive data this week, but the ongoing federal shut down and consequent concerns regarding US growth have seen the South African currency climb.
As it stands, the Rand is headed for its most significant five-day gain against its North American counterpart for a month.
The Pound Sterling/Rand exchange rate is currently in the region of 16.0721 as of 14:30 GMT
During local trading the US Dollar broadly declined as Federal Reserve Official Dennis Lockhart stated that without US data (like non-farm payrolls) being published, the central bank would have to be more cautious about tapering stimulus.
The GBP/ZAR exchange rate hit a high of 16.2306 Rand per Pound
As noted by strategists at Societe Generale; ‘Since the partial shutdown of the US administration, the market reaction has been more muted to slightly positive. Investors have interpreted the shutdown as an effective postponement of the tapering measures.’
The Rand pushed back below the psychological 10 Rand per Dollar level, and was also able to advance on the Pound as investor speculation regarding the extent of the British currency’s recent rally saw Sterling slip.
Some economists believe that the Rand’s out of character behaviour in recent weeks could signal a new direction in the currency.
According to Business Day, new research implies that the Rand could begin stabilising more at current levels and stop fluctuating as extensively as it has in the past.
In spite of a poor spate of domestic data the Rand has so far avoided any dramatic decreases, and the probability of the Rand consolidating at the R9.97 level is increasing.
That being said, the Rand remains incredibly vulnerable to global developments so if the Fed defies expectation and tapers easing in the next couple of months the currency could depreciate sharply.
South African economic data to watch out for next week includes foreign exchange reserves figures (out on Monday) and mining/manufacturing production reports, due out on Thursday.
Current South African (ZAR) Exchange Rates:
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The US Dollar/South African Rand Exchange Rate is currently in the region of: 10.0145 <
The Pound Sterling/South African Rand Exchange Rate is currently in the region of: 16.0721 >
The Euro/South African Rand Exchange Rate is currently in the region of: 13.6284 <
The Australian Dollar/South African Rand Exchange Rate is currently in the region of: 9.4276 >
The New Zealand Dollar/South African Rand Exchange Rate is currently in the region of 8.3068 <
The Canadian Dollar/South African Rand Exchange Rate is currently trading in the region of 9.6734 <
(Correct as of 14:30 GMT)
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