Rand starts week on back foot

Ndamanguluka Nakashole
The rand is starting the week on the back foot against the dollar, as emerging market currencies again gear up for economic news out of Turkey, while on the local front markets await the release of GDP data on Tuesday.

The local currency was changing hands at R14.75/US$ at 08:47 on Monday, down 0.5% on the day. It opened at R14.67 to the greenback.

"We look to another eventful week ahead for emerging markets, with Turkey likely to set the tone," said Bianca Botes of Peregrine Treasury Solutions in a morning note. "[Monday] sees the release of Turkish inflation data while markets are also anticipating the unveiling of the new Argentinian fiscal plan."

"At home, we are bracing ourselves for local manufacturing PMI and vehicle sales data later [Monday] and GDP data due for release on Tuesday."

South Africans will learn whether the country has entered a technical recession on Tuesday morning, when Stats SA releases real gross domestic product data for the second quarter of the year. GDP contracted by 2.2% in the first quarter.

Botes said the expected trading range Monday would be between R14.68 and R14.90 to the greenback.

According to NKC African Economics, concerns over the impact of the US-Canada trade spat around renegotiating the North American Free Trade Agreement, or Nafta, has also put the rand on the back foot.

The US, meanwhile, will be celebrating Labor Day on Monday.

-Fin24

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