Rand stable ahead of GDP data release

THE rand was in a stable range on Wednesday morning‚ suggesting a degree of caution as markets await the release of first-quarter gross domestic product (GDP) data.

However‚ the domestic currency has had a terrific run in the past couple of sessions‚ making it vulnerable to some profit-taking.

Statistics SA will release the GDP figures later in the morning. Some economists expect the data to show a contraction.

Standard Bank trader Warrick Butler said in a note that “if this is indeed the case there is not much chance the rand will be able to continue its journey lower [stronger]”.

The rand has bounced back from lows of R15.6171 to the dollar that it hit on Friday to R14.9213 on Wednesday morning‚ thanks to a weaker dollar and S& P Global Ratings’ decision to affirm SA’s foreign currency credit rating at investment grade.

Another potential key event risk lies with Fitch Ratings‚ which is expected to deliver its own verdict on the country’s credit rating in the evening. At 8.49am‚ the rand was at R14.9276 to the dollar from R14.9014 at the previous close.

It was at R16.9647 against the euro from R16.9278 previously‚ and at R21.7034 against the pound from R21.6701 previously.

The euro was at $1.1366‚ from $1.1359 previously.