The rand report is brought to you by Sable International
Last week saw the rand strengthen about 0.5% against the pound, with the pound weakening towards the end of the week on Brexit concerns. Negative commentary from Boris Johnson over the deal sent the pound into a small spiral. The GBP/ZAR ranged between R21.89 and R22.71 throughout the week and closed the week at R22.03 to the pound, which is 12 cents lower than the open of the week. The Brexit concerns remained present in the new week as the pound has already weakened about 0.9% against the USD this week.
The greenback had an impressive week last week, likely resulting from positive employment data. The positive employment data kept emerging markets firm, which allowed the rand to make up some ground against the pound. The rand has strengthened about 0.25% against the pound this week and it is currently trading at R21.97 to the pound.
With the USD having a prime week and emerging markets leeching off the positive data, the USD/ZAR was little changed and ranged between R16.55 and R16.98 to the greenback. The rand strengthened about 0.08% last week, opening and closing the week on the same cent at about R16.56. As for the new week, the rand has lost almost a percent and is currently trading R16.72.
In terms of local data, the GDP growth rate for the second quarter is set to be released today and is expected to drop by a further 40%, not to mention the expected size of the contraction. This will be the country's fourth consecutive quarter of negative growth. The outlook for the rand is uncertain, with the return of load shedding possibly preventing any significant gains. The currency will most likely be driven by the ongoing recovery in global economies as well as the speculation of future South African economic growth.
Market event calendar
Tuesday 8 September
Euro Area GDP Growth Rate (QoQ) 3[sup]rd[/sup] Est Q2: Expected at -12.1%
- South Africa GDP Growth Rate (QoQ) Q2: Expected at -40%[*]South Africa SACCI Business Confidence AUG: Expected at 83.4
Wednesday 9 September
Australia Westpac Consumer Confidence Index SEP: Expected at 77
- China Inflation Rate (YoY) AUG: Expected at 2.5%[*]Canada BoC Interest Rate Decision: Expected at 0.25%
Thursday 10 September
Euro Area ECB Interest Rate: Expected at 0%
- US PPI (MoM) AUG: Expected at 0.2%
Friday 11 September
Great Britain Balance of Trade JUL: Expected at £1.2B
- US Inflation Rate (YoY) AUG: Expected at 1.1%