ZAR Forex Report
The Rand reached a two-month high as data suggested the SA economy is improving as consumer spending, mining and factory output increased for May.
A very eventful week on a global scale – from a tragic attack in Nice to an attempted coup d’état in Turkey – all of which have had an effect on the markets, and the Rand.
Last week emerging market stocks climbed to levels not seen for eight months as Chinese trade data and commodities climbed. The Rand reached a two-month high as data suggested the SA economy is improving as consumer spending, mining and factory output increased for May and traders increased their bets that we will see boost stimulus in major economies.
SA’s interest rates, being at the highest point in six years, means it is an attractive investment in a stable market; foreign investment was at a record R85.7 billion ($6 billion) in the country’s stocks and government bonds in June and the trend continues for July. Foreigners have bought stocks for 29 straight days – the longest streak since 1999!
During the late trading session on Friday, emerging markets dropped and the ZAR lost 2.4% as news broke of a coup in Turkey where army officers attempted to seize power.
The Rand recovered these losses as it became clear that the attempt had failed. The ZAR opened at 14.37 versus the USD on Monday morning, after closing at 14.57 on Friday evening – these wide swings shows just how vulnerable the Rand can be and how quickly the slow and steady gains can be reversed….
While all sorts of rumours are spreading regarding the situation in Turkey, markets seem to be back to normal and all losses have been reversed – almost eerie, as though nothing has happened. On Tuesday the USDZAR opened at 14.28 and the Rand was at 15.82 and 18.89 against EUR and GBP respectively.
Not much data, or at least not heavy data, is expected this week and the Rand is expected to follow the global direction.
Tomorrow’s CPI and SARB interest rate decision on Thursday will however give the Rand some direction.
Have a great week.
ZAR FOREX RATES
USDZAR = 14.3146
GBPZAR = 18.8834
EURZAR = 15.8356
AUDZAR = 10.7244
NZDZAR = 10.0606
CADZAR = 10.9945
CHFZAR = 14.5742
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