South African rand opens stronger after positive data

PUBLISHED: Fri, 03 Jul 2020 11:03:33 GMT
Share

JOHANNESBURG (Reuters) – South Africa’s rand opened stronger on Friday and was on course for gains of roughly 2% against the dollar this week, after the first current account surplus in 17 years and an upbeat U.S. jobs report.

At 0650 GMT, the rand traded at 16.9350 versus the dollar, around 0.3% firmer than its previous close.

Government bonds were flat, with the yield on the 2030 bond at 9.27%.

On Thursday, central bank data showed a 1.3% of gross domestic product (GDP) surplus on the current account, which has long been a sore spot for Africa’s most industrialised economy. That added to optimism from the U.S. economy creating jobs at a record clip in June.

Although the rand has enjoyed a good week, it is still down some 17% against the U.S. currency so far this year, partly a reflection of deep-seated concerns about the health of domestic public finances.

The finance ministry predicts a deficit on its main budget of more than 14% of GDP this fiscal year and an economic contraction of over 7% in 2020. An economic recession that began last year deepened in the first quarter, before the coronavirus crisis really took hold, data showed this week.

Sign Up for Our Newsletter Daily Update
Get the best of CNBC Africa sent straight to your inbox with breaking business news, insights and updates from experts across the continent.
Get this delivered to your inbox, and more info about about our products and services. By signing up for newsletters, you are agreeing to our Terms of Use and Privacy Policy.