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The rand rebounded to R15.00 / $ on Tuesday on stronger than expected GDP data, announced by Statistics South Africa earlier in the day.
Despite Stats SA warning that the rally was coming from a very low base, the local currency rallied, jumped over 1% and was trading somewhat stronger even before the announcement.
The local unit strengthened to R15 / $ just before the market close. It had started the day at R15.14 per dollar.
Bianca Botes, CEO of Peregrine Treasury Solutions, said: “South Africa experienced significantly stronger than expected economic growth 66.1% (quarter-over-quarter, seasonally adjusted, annualized) in the third quarter of 2020, following the previous decline in the 51.7% in the second quarter.
“While this is clearly a base effect rebound and the strongest quarterly expansion pace SA has seen, it has been well received by the market seeking ‘only’ 54% growth.”
Andre Botha, Senior Currency Trader at TreasuryONE, noted that the rand was leading the way like most of its emerging market peers, and that SA was still on a negative growth trajectory of 7% for the full year of 2020.
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