The rand has been unmoved by better-than-expected GDP data on Tuesday, settling over R19 to the dollar as stage 6 load shedding rattles markets.
The South African rand continued to trade on the back foot on Tuesday, settling well over R19 to the dollar as stage 6 load shedding kicked in, rattling markets, while the dollar traded stronger.
The stats body reported GDP growth of 0.6% qoq for the second quarter of the year, beating economists expectations of between 0.1% and 0.4%. While South Africa’s ongoing power crisis has been priced into markets for some time, the rapid escalation to stage 6 comes after months of relative calm and amid assurances from the government and power utility Eskom that the energy situation was improving.
As has been the case for the past year, the rand’s weakness is also reflective of a stronger dollar, with the greenback hovering near three-month highs near the end of last week.Citadel Global noted that recent Chinese PMI reflected slowing overseas demand and are likely to result in increased calls on Beijing to unlock more stimulus spending.
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