The South African Rand fell is trading close to its lowest level in five years against the Pound and is weaker against other major peers as emerging market currencies were hit hard by the ongoing crisis occurring in Ukraine.
The threat of war between Russia and Ukraine is weighing heavily upon the Rand and has damaged investor sentiment towards the already troubled emerging market currencies.
“Events around Ukraine have resulted in an increase in global risk aversion over the weekend. An escalation of tensions will see a further fall in global risk aversion and Rand weakness,” said Rand Merchant Bank in a note to clients.
The Rand is also under pressure from last week’s disappointing trade figures which showed that the Africa’s biggest economy post a trade deficit of R17.06 billion in January. The figure shocked economists as it was a sharp decline from the R2.78 billion surplus recorded in December.
The disappointing data now puts investor attention back to South Africa’s current account, which has gradually gotten worse over the past year as strikes in the nation’s mining sector weigh heavily upon the economy.
It wasn’t all doom and gloom for the currency however as Monday’s Kagiso purchasing managers index advanced above 50 in February. The figure is an improvement on January’s figure of 49.9. A figure above 50 indicates expansion whereas a figure below indicates a contraction.
The Pound meanwhile pushed higher against a number of currencies after data showed that UK mortgage approvals rose than expected to a six-year high.
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,17.9981 ,
Euro,,South African Rand,14.7823 ,
US Dollar,,South African Rand,10.7320 ,
Australian Dollar,,South African Rand,9.5842 ,
[/table]
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