Rand attempts to recover early losses
Compiled by Dhivana Rajgopaul
JOHANNESBURG - The South African currency attempted to recover early losses in another volatile trading session yesterday according to NKC Research.
The release of domestic retail trade sales data again did not surprise, with indications of a steady recovery and technical bounce-back in Q3 not catching anybody off guard. All eyes are on President Ramaphosa’s recovery plan, the details of which will be provided on Thursday.
The fact that Finance Minister Tito Mboweni has written to Parliament requesting that his upcoming MTBPS to the legislature be delayed by a week is an ominous sign. Delaying the budget speech suggests a few things need to be ironed out, which casts doubt over the commitment behind the president’s recovery plan.
At the close of local trade, the rand quoted 0.15 percent weaker at R16.49/$, after trading in range of R16.45/$ - R16.58/$. The local unit traded on the back foot during Asian trade this morning. Expected range today R16.45/$ - R16.65/$.
Retail sales recover further in August
Seasonally adjusted retail trade sales rose by 4.0 percent m-o-m in August 2020. This follows a revised 0.6 percent m-o-m growth rate in July, with the latter showing an improvement from the initial estimate of a 1.1 percent m-o-m decline. Retail trade sales were still down 4.2 percent y-o-y in August, but this reflects a notable improvement from the 8.6 percent y-o-y drop recorded the previous month.
The August release again shows strong y-o-y increases in household furniture (+16.0 percent y-o-y) and hardware (+14.5 percent y-o-y) sales. Lockdown restrictions (and more widespread remote working) have encouraged a shift in consumption towards home improvement, specifically for those consumers not enduring negative income shocks.
You can also follow the Business Report on Instagram here
BUSINESS REPORT ONLINE