South Africa's Rand Turns Higher On Improved Sentiment
Rand (South Africa's currency) continued its extended rally during the Monday trading session. The recent gains in the Rand are on top of last week's build, which is yet another bullish sign.
According to experts, the improved investor sentiment related to South Africa's economy is playing a key role here. One of the key driving forces behind South Africa is its industries, and it appears to be staging good growth.
Rand Is Up By 0.87%
If we look at the last closing level of Rand on Friday, it has gained around 087% against the USD and was last seen trading at 18.5600.
As for the US Dollar, its performance can be gauged by looking at the US Dollar Index (DXY). When checked last time, the DXY was trading near 103.45 against other global currencies.
According to analysts, the gains in the Rand are coming due to the reduced frequency of power cuts in the residential areas. In addition, there's also speculation that the venue of the BRICS summit will be changed as the Russian president will also be attending in person.
Furthermore, the tension between the West and South Africa related to Russian relations has also reduced which is also positive for the Rand. Looking ahead, South Africa's president will be going on a peace mission by traveling to Ukraine and Russia.
Casparus Treurnicht, who's an asset manager said that it is mostly foreigners who are buying South Africa's Rand. He also added that it was the foreigners that initially caused the Rand selloff as well.
After losing 7% of its value against the greenback, the South African Rand has staged a recovery of 6% during June which is pretty impressive.
However, the sovereign bonds of South Africa that are denominated in the USD continue their rally which might be a little troubling for the government.
But despite these challenges, the real progress made by the South Africa was to control the load shedding which is driving the economic progress in the country.