Photo: File
Photo: File

Rand slips ahead of Q2 GDP release

By Time of article published Sep 8, 2020

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Compiled by Dhivana Rajgopaul

JOHANNESBURG - The South African currency lost traction as caution builds ahead of a pivotal GDP release today according to NKC Research.

Lower trading volumes, as US markets were closed on Monday for Labour Day celebrations, amplified oscillations in the rand, as traders await GDP figures for Q2, due for release on Tuesday. We anticipate an annualised contraction of around 55 percent compared to the median estimate of -44.5 percent q-o-q.

The GDP print – which is expected to be the worst in a century – comes against eroding prospects that Q3 will shape up to accelerate the recovery as load-shedding strains business activity. Yesterday’s consumer confidence index showed that consumers remained depressed during Q3, and it is unlikely that the business confidence index, to be released on Wednesday, will fare much better.

At the close of local trade, the rand quoted 0.56 percent weaker at R16.73/$, after trading in range of R16.59/$ - R16.77/$. Expected range today R16.70/$ - R17.00/$.

South African bourse

The JSE All Share (+0.97 percent) lifted its head yesterday following a series of losses last week. Large resources (+2.25 percent) and platinum mining (+3.42 percent) stocks were among the day’s standout performers. In the overall EM sphere, the MSCI Emerging Market Index (-0.45 percent) rose.

Brent crude oil

The Brent oil price struggled for traction at the start of the week. Saudi Arabia implemented its deepest monthly price cuts for crude sold to Asia since May, sparking concerns that demand recovery in the region is losing momentum. At the close of local trade, benchmark Brent crude futures quoted 0.10 percent higher at $42.08pb. Crude prices traded flat this morning.

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