THE rand was steady in early morning trade yesterday as the market awaited crucial second quarter gross domestic product (GDP) data set to be released later in the morning.
Analysts expect a modest rebound from the first-quarter contraction of 0,6% to growth of about 0,9% in the second.
The GDP contraction in the first quarter was mainly a result of sharply weaker output in mining and manufacturing as a result of the platinum sector strike and electricity constraints.
The monthly output data for the second quarter suggest that the gross value added from these two sectors probably contracted again.
However, the contraction is not nearly as sharp as in the first quarter, Barclays Research said in an early morning note.
At 8:19am, the rand was at R10,7014 against the dollar from Monday’s close of R10,7084.
Against the euro, the rand was at R14,1296 from a close of R14,1171 and was at R17,7418 against the pound from the close on Monday of R17,7354.
The euro was at $1,3206 from a close of $1,3186.
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Bidvest Bank chief currency dealer Ion de Vleeschauwer said the rand was still “fundamentally very fragile”.
“The GDP and other data this week are likely to re-emphasise this with weak growth capping the interest rate outlook and raising the potential for more negative ratings action down the line.”
Trade and government budget figures continued to paint a worrying scenario, leaving the local currency in a vulnerable position when emerging-market fund flows dried up, he said.
-BDLive
