Rand dips after GDP data, stocks up

Bonds weakened, with the yield on the benchmark government issue due in 2030 up 9.5 basis points to 9.265%. 
Image: Waldo Swiegers / Bloomberg

The rand fell against the US dollar on Tuesday as data showed the domestic recession deepened in the first quarter of this year – before the coronavirus pandemic hit the country and put further strain on the economy.

At 1500 GMT, the rand was 0.65% weaker at R17.37 per dollar.

Statistics South Africa said that first-quarter gross domestic product contracted 2% from the previous three months, led by declines in mining and manufacturing.

The economic outlook remains gloomy after a strict coronavirus lockdown imposed in late March piled more pressure on businesses and consumers.

“Not much has changed since Q1, except that thousands of jobs have most likely been lost, numerous businesses have most likely closed shop, while the country continues to struggle with a severe health crisis,” said Jacques Nel of research firm NKC African Economics.

Stocks this week continued to buck the global trend with the FTSE/JSE All Share index going up 0.41% to close at 54,362 points on Tuesday. The top 40 companies index closed up 0.51% at 50,175 points.

Bonds weakened, with the yield on the benchmark government issue due in 2030 up 9.5 basis points to 9.265%.

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The Rand strengthened today. Hello. Amateur commentators.

Thank God someone shares my irritation with these stupid updates. Every time the rand farts we get an update and it’s always some sweeping statement as to exactly why it moved. As if one can truly pin point a cause like that. Like seriously, you are telling me that literally out of an infinite amount of reasons for a change in exchange rate, you are telling me that it is ONLY due to “data showed the domestic recession deepened”. Thats it, that data caused the rand to dip by exactly 20 cents in the last 3 hours and 21 minuted and nothing else en the entire world, no person’s decision, no event, no news, no circumstance outside that little sentence had any influence on the exchange rate. Freaking pathetic. Pure speculation!

End of comments.

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