New Zealand Dollar to South African Rand (NZD/ZAR) Exchange Rate Flourishes; Awaits Fitch Upgrade
The New Zealand Dollar and South African Rand are currently at opposite ends of the currency market; the ‘Kiwi’ is high and flourishing whilst the Rand is low and struggling.
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The NZD/ZAR currency pairing is currently trading at 0.93851.
The New Zealand Dollar has reached highs on Wednesday against the US Dollar, as credit rating agency Fitch have hinted at an upgrade from the current AA stable rating, to the more favourable AA positive.
The ‘Kiwi’ is currently trading against the US Dollar at 0.8807.
Forex expert, Annette Beacher, stated: ‘This is a clear positive for the NZD in both the near and medium-term. A shift to a positive outlook does not necessarily guarantee a credit upgrade to AA+, but the odds have shifted decisively in that favour.’
With such positive attention for the New Zealand Dollar, the currency is looking favourable to investors; which has been gaining against the ‘Buck’ consistently in the past month.
Forex expert, Boris Schlossberg, stated: ‘As one of the only two currencies with any appreciable yield in the advanced industrialised universe, the ‘Kiwi’ has been the darling of the yield chasers and (the) upgrade by Fitch will only serve to reinforce its strength.’
With a positive outlook for the ‘Kiwi’ ahead, the outlook for the Rand however is somewhat negative in the near future. Despite NUMSA strikes potentially reaching an end, warnings of electricity plant workers ESKOM wanting to strike are circulating.
Furthermore investors have lost enthusiasm as US giant General Motors have closed their largest production site in South Africa due to the disruption in the country; whilst BMW have decided against expanding within South Africa due to the strike nature of its workers.
Wednesday has seen a new wage offer made from employers in an attempt to end the work stoppage. Labour Ministry representative Mokgadi Pela stated: ‘There is a new offer. We are encouraged by the attitude of both parties.’
Moreover, the strike is estimated to cost the South African businesses up to $28 million US Dollars per day as the strike continues.
The Rand is inevitably facing a period of volatility this week with the South African Mining Production and Manufacturing Production figures published on Thursday. In the aftermath of the longest mining strike in South Africa’s history, totalling five months, the results could seriously affect the Rand.
The Rand is currently trading against the US Dollar in the region of 0.0935; whilst the NZD/ZAR currency pairing is trading at 9.3851.