South Africa: The Rand Firms After Consumer Confidence, Current Account Data

by admin-anb

The rand recovered some losses on Thursday after a consumer confidence index improved, although new data also showed that South Africa’s current account deficit had widened.

At 1638 GMT, the rand traded at 19.1625 against the dollar , nearly 0.2% stronger than its previous close.

The dollar last traded around 0.1% stronger against a basket of global currencies.

The rand had weakened for most of this week, partly fuelled by a repeat of the country’s worst rolling blackouts implemented by state power utility Eskom, which have battered the country’s economy this year.

A survey released on Thursday showed that South Africa’s consumer confidence recovered somewhat in the third quarter, with a reading of minus 16 points, up from minus 25 points in the second quarter of this year.

But second-quarter current account data (ZACACT=ECI), (ZACAGP=ECI) showed the deficit had widened to 2.3% of gross domestic product from a revised 0.9% in the first quarter.

“Today’s consumer confidence and current account figures beat estimates providing some encouragement in what has been a tough year for South Africa with the rand attempting to claw back some lost gains,” said DailyFX analyst Warren Venketas.

“Unfortunately, this optimism has been marred by escalating ‘loadshedding’ in the country that is disrupting business activity,” he said in a research note, using a local term for power cuts.

Central bank data earlier on Thursday showed South Africa’s net foreign reserves fell to $55.444 billion by the end of August from $55.626 billion in July.

South Africa’s benchmark 2030 government bond was stronger, with the yield down 2.5 basis points to 10.385%.

Share on the Johannesburg Stock Exchange closed lower, with both the blue-chip Top-40 (.JTOPI) and the broader all-share (.JALSH) index down around 1.7%.

REUTERS

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