Rand breaks through R15/$ after positive local GDP data
A positive surprise for SA’s second-quarter GDP performance and upbeat Chinese data is lifting sentiment, as well as good news from Hong Kong
The rand broke through the R15/$ handle for the first time in almost a month on Wednesday, lifted by positive local economic news, as well as positive development related to protests in Hong Kong.
SA’s GDP rebounded by a surprise 3.1% in the second quarter data showed on Tuesday, while data on Wednesday showed there was surprising resilience in China’s services sector during August.
Reports on Wednesday also suggested that Hong Kong authorities are on the verge of withdrawing a controversial extradition bill that has sparked weeks of unrest in the city, including shutting down Hong Kong’s airport.
The rand was likely benefiting from this good economic news, especially the local data‚ as there have been fears in the market that SA was headed towards a recession, said Mercato Financial Services analyst Nico du Plessis, who added that sentiment may be lifted a little by the development in Hong Kong, but this effect is probably slight.
At 3.01pm, the rand was up 1.45% to R14.876/$ — its best level since August 7. It had risen 1.06% to R16.3912/€ and 0.67% to R18.1246/£. The euro had firmed 0.4% to $1.1018
The rand has continued to rally against the pound as Brexit uncertainty spooks investors. British MPs are set to vote on a law to block a no-deal Brexit, possibility postponing the Brexit deadline.
“Sterling has been exceptionally weak for quite a period. This latest move with [UK Prime Minister] Boris Johnson losing his parliamentary majority, does look as though we might see a postponement but there is a lot of uncertainty. Sterling is going to remain weak until people see how things unfold,” said Nedbank chief economist Dennis Dykes.
Gold had lost 0.23% to $1,543.94/oz while platinum added 1.68% to $978.56. Brent crude climbed 1.89% to $59.34.