The Rand managed to breach resistance of R 9.20 against the US Dollar to trade at its highest level in a week after South African bonds traded close to near record highs.
Signs of a weakening global economy strengthened bonds as economists predicted that investors will choose to shift their money into higher yielding emerging markets. The yield on the 2026 benchmark bond was at 6.79%, close to the previous session’s record of 6.77%.
“The rand has been supported by bond inflows, but with the euro expected to remain under pressure on ECB rate cut speculation, the rand may struggle to see a major upside, especially as domestic fundamentals are not supportive of gains,” said Christopher Shiells of Informa Global Markets.
Despite the Rand showing signs of stabilising on Wednesday the currency is expected to remain volatile after coming under pressure from a variety of factors. Tuesday saw state utility company Eskom resorting to rolling blackouts to prevent a crisis in South Africa’s power supply. According to the company the nation’s electric grid is operating above full capacity.
In 2008 a similar power crisis caused factories and mines to close, having a huge impact on Africa’s biggest economy. If such cuts happen again the Rand will weaken significantly as billions of Dollars is lost in production.
Continued unrest in the nation’s mining and transportation sectors is also expected to further drag upon the currency.
Current ZAR Exchange Rates
The South African Rand to Euro exchange rate is currently trading at 0.0836
The South African Rand to US Dollar exchange rate is currently trading at 0.1085
The South African Rand to Pound Sterling exchange rate is currently trading at 0.0711
The US Dollar to South African Rand exchange rate is currently trading at 9.2098
The Pound Sterling to South African Rand exchange rate is currently trading at 14.0594
These exchange rates were correct as of 09:55 am GMT
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