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IOL News
4 days ago
- Business
- IOL News
Despite 0. 1% growth in Q1, the rand held firm below R18 to the dollar
As of lunchtime on Wednesday, it was trading at R17.83, remaining range bound in the tight R17.75 to R18.05 bracket, Andre Cilliers, Currency Strategist at TreasuryONE indicated. Bianca Botes, director at Citadel Global, noted earlier on Wednesday morning that the currency was at R17.85. Image: Pixabay Despite South Africa's economy growing at a measly 0.1% in the first quarter of this year, the local currency was unmoved and continues to trade at levels below R18 to the dollar. As of lunchtime on Wednesday, it was trading at R17.83, remaining range bound in the tight R17.75 to R18.05 bracket, Andre Cilliers, Currency Strategist at TreasuryONE indicated. Bianca Botes, director at Citadel Global, noted earlier on Wednesday morning that the currency was at R17.85. Cilliers said the dismal gross domestic product (GDP) data hasn't dented the local currency, with it taking its lead from a weaker dollar instead. Overall, Tuesday's print of GDP data was better than expected by several economists, most of which noted that this was due to the agricultural sector performing well. Nolan Wapenaar, co-chief investment officer at Anchor Capital, explained that much of the production data and economic data that had already been had been pointing to a poor GDP print. 'In some ways, agriculture saved the day for the GDP numbers,' he said. Maarten Ackerman, chief economist and advisory partner at Citadel, said that the 'latest GDP figure paints a familiar picture: a few resilient sectors keeping the economy afloat, while structural underperformance holds us back. Without meaningful and coordinated reform, the economy will continue to limp along, unable to meaningfully reduce unemployment or address pressing social challenges.' Wapenaar added that the rand was not really impacted by numbers that were as expected. Earlier this week, Investec chief economist, Annabel Bishop, noted that the rand 'is not expected to strengthen to its fair value of close to R16 until the fundamentals for economic growth improve in South Africa'. The rand had been benefitting from a weaker dollar, which Bishop had previously said was a deliberate trade tactic by US President Donald Trump. His vacillatory position on tariffs has led to several knee-jerk market reactions. Trump's latest move – which follows trade negations including with President Cyril Ramaphosa – was to double the tariffs on steel and aluminium from 25% to 50%. In a statement on the White House website, he said he was doing this 'so that such imports will not threaten to impair the national security'. Wapenaar said the rand's relative strength was 'also a case of the markets being rather preoccupied with the White House' and what is happening there, which means that other data prints are less impactful than they might otherwise be'. IOL
IOL News
08-05-2025
- Business
- IOL News
Rand steadies as markets shrug off Fed hold and Vatican smoke signals
Following a temporary dip due to geopolitical tensions, the rand has rebounded, showcasing resilience against the dollar as markets digest the Fed's latest decisions Image: Picture: Henk Kruger/Independent Newspapers After Wednesday's wobble in the local currency, mostly the result of a fire fight between India and Pakistan, the rand reversed its losses, instead moving back to a position where it continues to gain ground against the dollar. This stabilisation comes despite the US' Federal Reserve holding interest rates steady, which seems to have been priced into valuations across markets even though the States' central bank may have scope to cut interest rates. Between its New York close and mid-morning on Wednesday, the local currency had dropped some 20c after having traded at the R18.15 level in New York on Tuesday night. On Thursday, however, the currency was increasing in strength, wand was in the R18.16 range – its lowest level in a month – just after lunch. Bianca Botes, Director at Citadel Global, stated that, although risk sentiment remains mixed, the rand opened steady at R18.22 on Thursday morning. Nolan Wapenaar, co-chief investment officer at Anchor Capital, said the last 24 hours were a non-event. 'Black smoke in the Vatican and a Fed hold were very broadly anticipated. The silence in conclave and as expected Fed commentary mean that we are business as usual,' said Wapenaar.
