Published: 3 Dec at 5 PM Tags: Dollar, Pound Sterling, America, UK, USA, India, South Africa,
The Rand adopted a bearish relationship with the majority of its most traded rivals today as South Africa
's current-account deficit unexpectedly widened.
While economists had forecast a shortfall of 6 per cent of GDP, following a revised shortfall of 5.9 per cent in the second quarter, the figure actually came in at 6.8 per cent of GDP.
This was the largest deficit recorded for over five years and is reflective of the impact a softening Rand and social unrest has had on the South African economy.
In a statement issued with the figures the Reserve Bank of South Africa commented that ‘Exports were constrained by lustreless export markets and domestic supply-side constraints’.
The hours following the data publication saw significant and widespread Rand declines, with the emerging-market asset hitting a low of 10.3915 against its US counterpart.
According to one Johannesburg based economist; ‘If it were not for the revision in the previous quarter, the deficit would have been 7.4 per cent. We need ever-increasing financing to fund our external imbalances, which is a worry. It’s an ongoing symptom of the mismanagement of this country.’
The Rand fell beyond 17.07 per Pound as stronger-than-anticipated UK construction data lent the British asset support.
With South African foreign exchange reserve figures not due out until Friday, global developments are most likely to impact the Rand in the days ahead.
In other currency news, the Pound jumped close to a two-year high against the US Dollar ahead of tomorrow’s UK services report as domestic construction output data beat estimates.
The Pound is currently trading against the US Dollar in the region of 1.6409
Meanwhile, the Indian Rupee shed recent gains against the ‘Greenback’ as the upcoming US non-farm payrolls report once more sparked speculation surrounding the tapering of quantitative easing.
The USD/INR exchange rate was in the region of 62.3080 as of 16:50 GMT.
As of Tuesday, 3rd December 2013, the Pound Sterling currency rates mentioned within this news item were as follows:
GBP USD exchange rate was 1.6388, GBP INR exchange rate was 102.1493, and GBP ZAR exchange rate was 16.9302.