CD South Africa: Rand follows EUR/USD collapse

The rand is back on the EUR/USD band wagon and replicated the sharp drop from 1.13 to 1.10 yesterday. Poor German ZEW economic sentiment and strong US building permits proved to be the catalysts for the movement.

EUR/ZAR has been the main mover, coming from 13/€ the beginning of this month to 13.80€, to trade back at 13.25/€ yesterday. Local news is looking up as ratings agency Moody’s looks unlikely to downgrade SA’s credit rating and the Government has agreed a wage deal with unions. Risk today comes from SA inflation this morning, and the US Federal Reserve meeting minutes released this evening.

Commentary by Justin Lodewyk