Rand weaker ahead of GDP data

In early trade the rand was at R15.37 against the dollar, 0.15% weaker than its previous close.
Image: Shutterstock

South Africa’s rand dipped in early trade on Tuesday as concerns over the Russia-Ukraine conflict lingered, while traders also awaited the release of domestic economic growth numbers later in the day.

At 0637 GMT, the rand traded at R15.37 against the dollar, 0.15% weaker than its previous close.

Russia-Ukraine peace talks made scant progress on Monday. The military conflict in Ukraine, which Russia calls a “special operation”, has triggered sweeping sanctions on Russia that have rattled global markets.

South Africa’s higher exposure to commodities such as gold and palladium has helped limit losses in the currency as the conflict saps investors appetite for riskier assets.

“(The rand) has been R15.20-R15.50 for a little while now, weathering the storm that has affected a lot of other currencies and markets,” Warrick Butler, chief trader at Standard Bank, wrote in a note.

“Most commodity currencies are in a similar position to the rand as are a couple of EM countries far away from the conflict. Money needs to find a home.”

On the local front, the focus was on gross domestic product data for the October-December 2021 period due at 0930 GMT. It was expected to show that the economy grew 1.3% in the quarter after contracting 1.5% in the previous three months.

In fixed income, the yield on the benchmark 2030 government bond was up 3.5 basis points to 10.030%, reflecting weaker prices.

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