Rand weakens as yields hit year high

Trade report 04/06/2013
The rand extended its overnight fall in early Thursday morning trade after the US Federal reserve beckoned an end to its stimulus programme, which has boosted appetite for high yielding emerging market currencies such as the rand. The rand was at R10.2455/$ at 08:41, 0.54% weaker than its New York close and a sharp drop from R9.91, its strongest level in Wednesday trade. The USD-ZAR is expected to trade at 10.15-10.3500.

The current account deficit narrowed to 5.8% of gross domestic profit (GDP) in the first quarter of this year down from the 6.5% of GDP in the fourth quarter of 2012. The Reserve Bank’s June quarterly bulletin released on Wednesday showed that the account deficit narrowed from R212.6bn to R190.9bn. A consensus done by BDlive forecasted for a deficit of 7% of GDP, thus the results were much better than expected.

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