The South African rand fell today for the first time after three sessions of gains on concerns that the economic slowdown in China will diminish demand for commodities, reducing attractiveness of South Africa’s commodity-linked currency.
China was showing signs that its economic growth is moderating for some time now. It’s bad for commodities and for South Africa’s currency as the South African economy depends on exports of raw materials and China is important trading partner. Nevertheless, the economy in the SA itself looks robust enough to support the rand. In fact, some economists even speculate that the nation’s central bank may raise interest rates in the near future.
USD/ZAR climbed from 7.5270 to 7.6240 as of 14:22 GMT today, erasing losses of the previous two days.
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