By Kouthar Sambo
The rand is weakening against global currencies following the ZAR trading at around R18.26 against the dollar at the close of business on Tuesday.
Speaking on VOC’s PM Drive show on Wednesday, an economist Ulrich Joubert said there may not be cause for concern as the dollar has been trading against all currencies.
“This afternoon the rand was at R18.31 to the dollar, but the rand went out against the Euro, as well as the Pound. The Purchasing Managers’ Index (PMI) – an indicator of the prevailing direction of economic trends in the manufacturing and service sectors – shows a weak performance of the PMI in Europe,” detailed Joubert.
“At the same time, we see the possibility of two cuts in the United States (US) but that possibility is slightly less in the currency in Europe due to the European Union situation and the performance of the European economy is often weaker than that of the US.”
He added that the rand is trading in these financial markets and that South Africa cannot escape the “overall trends.” According to Joubert, the rand is much stronger than before the elections when the rand was trading over 19 rands to the dollar.
“There will be trending of the rand against the dollar, but also a trending of the rands (rather poor levels) against the pound and the euro,” added Joubert.
The June inflation data was released on Tuesday, however, Joubert predicts that if all goes well with the African Growth and Opportunity Act (AGOA) agreement with the US, and the performance in the country’s (South Africa) exports, the economy should improve.
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