South African rand slips on global caution; GDP in focus

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South African rand slips on global caution; GDP in focus

10:47 CAT | 07 Jun 2022

Image: Reuters

The South African rand slipped early on Tuesday, as a surprisingly large rate hike in Australia heightened global investor caution.

The Reserve Bank of Australia raised interest rates by the most in 22 years, stunning markets in the lead-up to U.S. inflation data and central bank meetings in Europe and the United States.

At 0642 GMT, the rand ZAR=D3 traded at 15.5100 against the dollar, around 0.5% weaker than its previous close.

Later in the session, the focus will be on South Africa’s first-quarter gross domestic product figures, which are due at 0930 GMT.

Analysts polled by Reuters expect quarter-on-quarter growth of 1.2% and a year-on-year expansion of 1.7%, in line with the previous quarter’s figures.

South Africa’s economic recovery from the COVID-19 pandemic has been uneven, and with unemployment close to record highs the government is under pressure to achieve higher rates of growth.

The government’s benchmark 2030 bond ZAR2030= was weaker in early deals, with the yield rising 4.5 basis points to 9.94%

Source: Reuters