The Rand opened at 12.91 against the USD last week after trading as low as 12.84 – a month and a half low.
The US Federal Reserve was playing down rate hikes on Tuesday which led to a weaker USD.
There was room for ZAR strength as the weaker USD coincided with SA’s latest growth figures which came in at 2.5%, technically taking the country out of a recession.
Food for thought is that agriculture was one of the biggest contributors to the stronger figures.
Following the GDP figures on Wednesday, ZAR strengthened to as low as 12.75 to the USD, finally closing at 12.80.
The USD weakened to its lowest in more than two years against the Euro as it pushed through 1.20 as traders expected expect tapering as soon as October, meaning a slowdown in the quantitative easing program and potential rate increases.
News being neither here nor there and a favourable risk environment saw the ZAR appreciate to 12.74 against the Dollar, before weakening again.
The Rand closed the week at 12.92 against USD, 15.51 against the Euro and at 17.00 against the Pound Sterling.
The Dollar staged a slight comeback on Monday as local political risk seemed to pop its ugly head again; as a result, ZAR pushed closer to 13.00 and ended at 12.96 against the USD.
In early Tuesday trade, the ZAR strengthened slightly as SA’s High Court overturned the election in 2015 of ANC leaders that are strong allies to President Zuma. The members want Zuma to be succeeded by his ex-wife, Nkosazana Dlamini-Zuma.
Data to look out for is SA business confidence tomorrow and current account figures on Thursday. Globally we have the Bank of England policy decision as well as US inflation data on Thursday.
ZAR FOREX RATE
USDZAR = 12.9461
GBPZAR = 17.1607
EURZAR = 15.4851
AUDZAR = 10.3945
NZDZAR = 9.45172
CADZAR = 10.6771
CHFZAR = 13.5230
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