The rand bounced back in early trading after Chinese gross domestic product (GDP) came in within the expected range.
China’s GDP grew 7.6% in the quarter from a year earlier‚ in line with market expectations. Analysts said the figure confirmed a slowdown but not stagnation. The growth number was the lowest and was the sixth straight quarter of slower growth. Analysts said the fact the figure was not worse than expected was cause for relief.
At 08:37 the rand was bid at R8.3073 to the dollar from its previous close of R8.3181. It was bid at R10.1245 to the euro from its previous close of R10.1518 and at R12.8155 against sterling from R12.8301 before.
The euro was bid at S$1.2195 from its previous close of $1.2207.
Absa Capital said in its morning report that there had been an improvement in risk appetite after China’s growth did not slow more than expected in the second quarter.
“We have seen the AUD rally in response to the Chinese data and we would expect commodity prices and the ZAR also to enjoy some short covering into the weekend‚” Absa said.
Mohammed Nalla of Nedbank Treasury said: “The rand is up on the back of the Chinese GDP numbers. There is speculation of further easing measures for China‚ which has increased risk appetite.”
Dow Jones Newswires reported that the euro edged up against the dollar on Friday in Asia‚ also on the Chinese economic growth figures. Some traders had anticipated a figure below 7%.
Traders also said the currency may rise more if Italy’s bond auction later in the day met firm demand. - I-Net Bridge