The rand of South Africa traded near its 6-month highest value against the U.S. dollar today before and after the report that showed acceleration in the producer price index last month.
The producer-inflation report that was released today at 9:30 GMT today in Johannesburg revealed that June inflation accelerated to 16.8 percent year-to-year growth compared to 16.4 percent annual rate in May. Monthly advance in June was 2.6 percent. According to economic analysts the annual producer price index would be 17 percent last month.
Despite the fact that the inflation number were below the estimate, traders still believe that the rand will appreciate more soon as the financial authorities will have to raise rates in order to keep inflation down.
South African currency is ending this week with a sixth straight gain, climbing about 10.2 percent since June 122, when the national interest rate was lifted by 50 basis points to the 5-year high level of 12 percent. Despite the global risk aversion, rand remains an attractive currency on Forex.
USD/ZAR fell to 7.3601 today and then rose to about 0.7820 after the report was released after closing at 7.3918 yesterday. Nevertheless rand is still trading quite close to its strongest level since February — 0.73516 that was reached yesterday.
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