The rand strengthened against the US dollar on Monday and a number of emerging-market currencies climbed to a record high as investor appetite grew for more progressive and riskier assets.
Anchor Capital also noted that the rand was impacted by the fact that the dollar declined more than what was expected in July.
Bloomberg noted that the rand traded at a one-year high when compared to the dollar.
The rand was trading at around R17.69 at the close of business on Monday.
The ZAR was trading at around R17.72 on Tuesday at 9.05am. Compared to other global currencies, the rand traded at R19.64 against the euro and R23.03 against the pound.
Anchor Capital added that in the US, the Conference Board, a leading economic index fell by 0.6% on a month-on-month basis in July, exceeding market expectations of a 0.3% decline.
The economic index also recorded a drop of 0.2% in the previous month (June).
Government of National Unity
Financial experts also noted that the ZAR is on track for its longest winning streak since 2011.
The main reason for this “streak” has been the impact of the Government of National Unity (GNU).
Business confidence in South Africa began to recover in June and July after a sharp decline as the country headed into the May 29 elections.
Research from the South African Chamber of Commerce and Industry (SACCI) showed on Wednesday that its business confidence index rose to 109.1 in July, up from 109.0 in June and 107.8 in May.
The body also acknowledged the positive impact the GNU has had on SA’s Business Confidence Index.
The body noted that there were expectations of improvement in business sentiment after it became clear that a coalition government would be formed.
“The broader representation and accountability in government have created an opportunity for efficient economic expansion, more employment opportunities, and increased inclusiveness,” SACCI said.
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