The Rand has been breathing some fresh air since its low of around R18.00 (ZAR) to the Dollar (USD) in the past week. We are witnessing the Rand clawing back some strength trading around the 17.61 price level. The greenback has softened since having a bit of a rally in the past week; this is due to economic data out of the US showing a slowdown in the economy, specifically in the Manufacturing Sector.
As a commodity-linked currency, looking at Gold in the market is essential. Gold has seen a short-term recovery which bodes well for the Rand; however, as of today, Spot gold declined 0.4% to $1,719.47. The surge could be attributed to the market weighing in on US data which may lead to the Fed reviewing how aggressive they are increasing their rates. S&P, the rating Agency, will release PMI data on South Africa later today.
Intense load-shedding is keeping potential growth hiding in the dark.
Looking at PMI, ABSA released data showing that the Purchasing Managers’ Index (PMI), released on Monday, fell to 48.2 index points in September from an improved 52.1 index points in August.
It is expected that the S&P could be showing the same contraction as in the PMI data due to the National Power Provider Eskom.
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