Rand weaker ahead of local trade balance data

The rand was weaker against major currencies on Monday morning ahead of the release of local trade balance data.

At 8.30am‚ the rand was at R13.3298 against the dollar from a previous close of R13.2943.

Against the euro the rand was at R14.9790 from a previous close of R14.8574. Against the pound‚ the rand was at R20.5660 from R20.4937.

The euro was at $1.1238 from $1.1174 previously.

The South African Revenue Service will release July trade data later in the afternoon amid conflicting views of the state of the trade balance.

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Some economists think the surplus on the trade balance narrowed from R5.8bn in June to about R1.5bn‚ while expect the trade balance to have returned to deficit territory after two consecutive months of surpluses.

Barclays Research said in an early morning note that the rand was likely to remain vulnerable to investor speculation in the wake of hawkish comments from US Federal Reserve vice-chairman Stanley Fischer at the Jackson Hole symposium on Saturday about the possibility of a September rate hike.

"In addition‚ this morning’s weaker Chinese equity market open could weigh on commodity-based currencies such as the rand. On the data front‚ we expect a slightly larger than consensus domestic trade deficit reading‚ which could aggravate further rand weakness at the start of the week.

"With today a UK holiday‚ we expect exaggerated rand moves in thin trading volumes‚" said the research team.

- BDlive