The ZAR/USD exchange rate fell to its lowest level in a week as sentiment towards perceived riskier assets weakened ahead of today’s European Central Bank rate decision and Friday’s eagerly anticipated non-farm payrolls data out of the United States.
The Rand was under pressure as investors grew increasingly wary about taking positions before the ECB meeting. Deflation is a major concern in the Eurozone and economists will be looking for any signs of stimulus measures being introduced at today’s policy meeting. As Europe is one of South Africa’s biggest trading partners the Rand tends to track the single currency’s movements.
An ongoing strike in South Africa’s mining sector is also weighing upon sentiment. The strike by the Association of Mineworkers and Construction Union (AMCU) is now into its tenth week with little sign of it coming to an end.
Anglo Platinum (Amplats) and Lonmin sent force majeure notices to some of the suppliers to its strike-hit South African mines. Impala Platinum (Implats) and Lonmin have also been affected.
“The ongoing events in the mining sector have not assisted the Rand’s cause. Investors are being cautious ahead of the interest rate decision by the ECB and the non-farm payrolls data out of the US. They will be fairly significant for emerging markets across the board. As a result the Rand has not made much progress and it’s also been restricted to a very narrow range,” said a currency trader.
According to Rueters trading of the Rand was at its lowest level since March 19th as the market takes a wait-and-see approach to today’s big events.
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,17.7222 ,
Euro,,South African Rand,14.6489 ,
US Dollar,,South African Rand,10.6510 ,
Australian Dollar,,South African Rand,9.8124 ,
[/table]
Comments are closed.