Tue, February 07, 2023

South Africa’s Rand Recovers from this Week’s Shock

Wibest – Rand: South African rand bills.

The South African rand successfully regained its footing in yesterday’s trading following an upsetting fall earlier this week. Aside from the manufacturing PMI, the GDP growth of the country is also weighing in on the rand.

Experts now call for reforms in the country’s system to help its economic growth and the currency.

Earlier this week, South Africa’s total vehicle sales for November went from 0.20% to -5.80% on a year-over-year basis. The figures, unfortunately, even went beyond expectation of -3.50% prior.Wibest – Rand: Johannesburg, South Africa.

The next factor that weighed in on the South African rand is the country’s GDP results released on Tuesday. South Africa’s GDP in the third quarter of the year went down from 0.9% to 0.1% (YoY), plunging even against expectations of 0.4%.

Moreover, yesterday, the annualized GDP QoQ for the third quarter nosedived from 3.2% to -0.6%. The figures surprised traders who expected 0.1% and sent the rand to negative territories in forex trading.

Yesterday’s Recovery

Fortunately, despite those alarming results, the South African currency still picked itself up in sessions.

The USD ZAR exchange rate dived 0.50% or 0.0733 points in yesterday’s trading. The rand took advantage of the pressure on the greenback and was able to bounce from Tuesday’s loss.

Wibest – Rand: South African rand coins and banknotes.Next, the EUR ZAR trading pair went down by 0.44% or 0.0711 points in Wednesday’s trading sessions. The pair even managed to go as low as R16.1192 during the day.

Unfortunately, though, the pound currency continued to gain altitude against the South African rand yesterday.

The GBP ZAR exchange rate rallied 0.40% or 0.0764 points in yesterday’s trading sessions. The pair also extended its reaches from R18.9770 to as high as R19.0871.

The broad slowdown in Africa’s largest and most advanced economy was carefully weighed by traders yesterday.

According to exports, trade war tensions and the global economic prospects are keeping the rand on the defensive. It’s still expected to be on its back foot, especially as tensions between Washington and Beijing escalate.

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