South African Rand (ZAR) Weathers Poor Domestic Data to Trade Flatly

Although South Africa’s gauge of Consumer Confidence showed a decline in sentiment, the Rand was able hold its own against the US Dollar as an ecostat from the North American nation also failed to impress. The Rand initially declined against the ‘Greenback’ as investors digested the news that South Africa’s Consumer Confidence index fell from 0 in the fourth quarter of last year to -4 in the first quarter of this year. The decline was in line with forecasts but still indicative of the detrimental impact of South Africa’s rolling blackouts and mixed domestic data.

Economist Sizwe Nxedlana stated; ‘With the escalation of load shedding, consumers have understandably become more negative about South Africa’s economic prospects.’ However, after the US ADP Employment Change report showed a weaker-than-expected improvement in the labour market, the Rand was able to recoup losses. The South African currency was also supported by the fact that Greece met its debt payment to the IMF as it reduced the odds of the ‘Grexit’.

This week the only other South African data to be aware of is the nation’s Foreign Exchange Reserves number. Economists with an interest in the Rand will also be focusing on the US Non-Farm Payrolls report and any developments in Greece. Next week the South African ecostats to focus on include the nation’s Manufacturing and Mining Production numbers. The Pound Sterling to South African Rand exchange rate climbed by 0.5% to 18.2660, while the US Dollar to South African Rand exchange rate was trading in the region of 11.9952.