Rand shrugs off current account deficit to firm in early trade | Fin24
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Rand shrugs off current account deficit to firm in early trade

Jun 22 2018 11:12

The rand firmed slightly in early trade on Friday, shrugging off a widening current account deficit to reach its best level this week. 

At 11:04 it was trading at R13.52 against the dollar, up 0.41%. 

On Thursday the Reserve Bank announced that SA's current account deficit had widened to 4.8% of GDP, which initially caused the local currency to weaken. 

"[The] current account deficit that was wider than expectations had very little impact on the rand beyond the immediate term following the release," said Bianca Botes, of Peregrine Treasury Solutions, in a morning note. 

Botes said the relative strength of the local unit was caused by global factors, such as the release of weak US manufacturing data and a correction to the "overreaction" seen earlier this week. 

The dollar index, which tracks the currency's value against a basket of peers, was down 0.34% on Friday. 

NKC African Economics, meanwhile, estimated the rand's expected range for Friday at between R13.40/$ and R13.65/$.

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