The rand showed signs of stability in trade on Wednesday (12 June), recovering as much as 3% after infighting within the ANC over the mandate of the country\u2019s Reserve Bank exacerbated losses.<\/p>\n
“The rand is finally starting to play catch-up with other emerging markets as the likelihood of a rate cut by the Fed continues to render support,” said Bianca Botes, treasury partner at Peregrine Treasury Solutions.<\/p>\n
Botes said that a surprise uptick in manufacturing data, and a cool-off in trade wars assisted the rand\u2019s performance on Tuesday.<\/p>\n
StatsSA data showed that manufacturing production increased by 4.6% in April 2019 compared with April 2018.<\/p>\n
Seasonally adjusted manufacturing production increased by 2.8% in April 2019 compared with March 2019. This followed month-on-month changes of 0.9% in March 2019 and -1,6% in February 2019.<\/p>\n
Gross domestic product data released earlier this week showed South Africa had its worst quarterly performance since 2009 in the three months through March.<\/p>\n
“The local currency has regained just under 3% after reaching a low of R15.10\/$ on the back of the SARB fallout and renewed tariffs threats last week,” said Botes.<\/p>\n
“The global trade dynamic continues to share the spotlight with global growth concerns and the subsequent effect it will have on interest rates.”<\/p>\n
Retail sales from the local economy, CPI and real earnings from the US are all due for release on Wednesday, “while we will also pay attention to the tone of ECB president Draghi during his address,” Botes said.<\/p>\n