South African Rand (ZAR) Exchange Rate: Chinese Data puts the Rand under Pressure
On Friday the surprisingly strong gain in US non-farm payrolls saw the South African Rand lose ground against the US Dollar, and the emerging-market currency came under further pressure over the weekend as Ukraine tensions increased.
If you're looking to make an international money transfer, we recommend TorFX.
As a comparatively data-heavy week kicked off, the Rand was struggling as Chinese trade data dampened the asset’s appeal.
China is one of South Africa’s main trading partners, so the news that the nation recorded an 18.1 per cent slump in exports took a toll on the Rand.
Economists had forecast an export increase of 7.5 per cent.
The export decline resulted in China recording a trade deficit of $23 billion, the largest for two years. Imports were up 10.1 per cent.
And the bad news continued as China’s consumer price index was shown to have gained by 2 per cent in February year-on-year, the most modest advance for 13 months. Economists had forecast an annual rise of 2.1 per cent.
Meanwhile, China’s producer prices dipped by 2 per cent.
In the opinion of analyst Du Liang; ‘The inflation and PPI numbers signal a lack of demand from consumers and industries, while the export number is way below expectations even after discounting the Chinese New Year effect, so investors are concerned.’
This week the most influential South African reports to be aware of include tomorrow’s business confidence index, Wednesday’s current account data and Thursday’s mining/manufacturing production figures.
In the third quarter of last year South Africa’s current account deficit widened to the largest for five years.
With US news lacking today additional Rand volatility may be limited in the hours ahead.
The Rand is currently trading against the US Dollar in the region of 10.6760 and trading against the Pound in the region of 0.5994.