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South Africa’s rand weakens ahead of GDP data

South Africa’s rand weakens ahead of GDP data

2020-12-08

South Africa’s rand weakened in early trade on Tuesday ahead of the release of third-quarter gross domestic product (GDP) data, which is expected to show a recovery after a steep contraction in the previous quarter.

At 0615 GMT, the rand ZAR=D3 traded at 15.1675 versus the dollar, 0.18% weaker than its previous close.

The rand has gained about 6% against the U.S. currency since the start of November, supported by an uptick in global risk appetite that has largely outweighed investors’ worries about South Africa’s dire economic situation.

Third-quarter growth data ZAGDP=ECI is due at 0930 GMT.

Analysts polled by Reuters predict a 52.6% expansion in quarter-on-quarter terms in the July-September quarter, after a 51% contraction in the prior three months. A 7.2% contraction is expected in year-on-year terms.

In fixed income, the yield on the benchmark government bond due in 2030 ZAR2030= was up a basis point to 8.94%.

Source: Reuters

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