Rand weak on disappointing Chinese gross domestic product

JOHANNESBURG — The rand weakened past the psychologically important R9 to the dollar level yesterday as disappointing Chinese growth data weighed on global markets.

Business Day

Commodity-linked currencies, including the rand, took a hit after China’s gross domestic product (GDP) undershot market expectations, with the growth rate slowing in the first quarter of the year.

China is the world’s biggest commodities consumer and South Africa’s single biggest trading partner. The resource-heavy local currency fell to its lowest in the session so far after the Chinese GDP report.

The rand weakened to R9,0279 to the dollar in early morning trade, nearly 1% off its close in New York last Friday.

Emerging market currencies were also under pressure with a rally from last week seemingly overdone and global risk sentiment turning bearish.

“Technically, the dollar/rand looks set to stage even greater gains with levels back above R9,0 to the dollar already achieved,” said Tradition Analytics in a morning note to clients.

The rand is at a week-low against the dollar and finds its next support barrier at the R9,15-R9,20 area.

“Targets back up towards R9,2 now look realistic in the coming trading sessions and trading off a long dollar base will almost certainly be favoured whilst commodity prices remain on the defensive,” Tradition added.

Yields on government debt rose two basis points each to 5,31% on the 2015 note and 7,055% on the 2026 issue.

Investors this week await inflation data for March that comes out tomorrow. It was at 5,9% year-on-year in February, just a whisker away from the upper end of the central bank’s 3%-6% target for consumer price growth.

3 Responses to Rand weak on disappointing Chinese gross domestic product

  1. kedo April 16, 2013 at 8:56 am #

    See how a Zimbabwean woman became a millionaire by buying and selling accidented cars, Very interesting. Go to (ACCIDENTEDCARS.COM) to see the various methods and companies she used (ACCIDENTEDCARS.COM). Wake up Zimbabwe

  2. Zimbabwe Classifieds April 16, 2013 at 4:39 pm #

    A week rand hits the sourthern part the most i realised we had to do something to stay in busines. this is really hitting a bad spot on a hurting wound. its time we used the US dollar only. from www.inchis.com

  3. convergence April 17, 2013 at 12:36 pm #

    I am now afraid South Africa is inheriting Zimbabwe’s recent past.

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