September 08, 2016

South African Rand Leads Currency Gains

The rand strengthened the most in three months, leading global currency gains after data showed South Africa’s economy expanded more than forecast in the second quarter while the trade balance swung to a surplus for the first time in more than a year.

The rand gained 2.6 percent to 14.0062 against the dollar at 4:40 p.m. in Johannesburg, the most since June 3 and the biggest gain among more than 150 currencies tracked by Bloomberg. Yields on benchmark government bonds due Dec. 2026 fell 14 basis points to 8.73 percent, the lowest since August 23 on a closing basis.

Signs of a rebound in Africa’s most-industrialized economy coincided with weaker-than-expected data in the U.S., keeping prospects of a Federal Reserve rate increase this month low and boosting demand for higher-yielding emerging-market assets.

South Africa’s gross domestic product rose an annualized 3.3 percent in the second-quarter, beating expectations for a 2.6 percent expansion and avoiding a recession after a 1.2 percent contraction in the previous three months. The country posted a trade surplus of 33.3 billion rand ($2.4 billion) as the value of exports rose at a faster rate than imports.

“The improvements observed in South Africa’s terms of trade picture in recent months is probably the most encouraging aspect of today’s GDP release and should bode in favor of narrowing the country’s still elevated external account imbalances,” Jeffrey Schultz, economist at BNP Paribas Securities in Johannesburg, said in an e-mailed note.

“This has the potential to provide some near-term respite for the rand which has recently been negatively impacted by unfortunate political uncertainty.”

After reading this article from Bloomberg, I recalled the prophecy spoken by Nigerian Prophet TB Joshua at the beginning of 2016: "First of all, Southern Africa - The currency that is going up and down will soon be stable. By August, we’ll begin to see fading away of the challenges. We often come out of the challenges stronger."

Source: Bloomberg


Jekwu said...

Olu,are you there?
Did I hear you said we will come out of the challenges? I think you are dreaming.may your dream come true please. I want fuel back to 87 naria,our sweet naria back to 180 to 190 to a doller abeg.

ats three said...

It is well with 9ja. Jekwu be and stay positive.

inumidun said...

God dey..