The rand was trading at R11.81\/dollar on Tuesday afternoon (6 March), in an immediate response to the announcement that South Africa\u2019s GDP expanded by 3.1% in the fourth quarter of 2017, and by 1.3% for the year as a whole.<\/p>\n
Stats SA reported on Tuesday that country’s GDP growth\u00a0exceeded National Treasury\u2019s expectation of 1.0% growth announced during the National Budget Speech in February last year, and shot far past market expectations which ranged from 0.2% to 0.8%.<\/p>\n
The South African economy has been heading in a stronger direction in recent weeks, riding a wave of positive sentiment following the election of Cyril Ramaphosa as the new president. However, some of this sentiment was undone in recent sessions, in the back of uncertainty around South Africa’s land reform policies.<\/p>\n
According to Bianca Botes of Peregrine Treasury Solutions, the\u00a0rand strength in the most recent session has been supported by a weaker US dollar as the White House scrambles on trade policies, as well as positive sentiment roused by Finance Minister Nene\u2019s address at a union meeting in Pretoria on Monday.<\/p>\n
“Nene discussed the outcomes of his meeting with credit ratings agency Moody\u2019s and the country\u2019s improved economic outlook,” said Botes.<\/p>\n
His key messages were:<\/p>\n
“Nene is market friendly, and these messages were well received in the current risk-off environment.<\/p>\n
“We still however feel this move cannot be sustained based on currency market fundamentals and we will continue to look for a move to above R12.00\/dollar keeping a close eye on Moody’s later this month,” Botes said.<\/p>\n
By 13h45 on Tuesday, the rand was trading stronger at R11.74 to the US dollar, with gains across the other major currencies:<\/p>\n