The rand weakened for the first time in five days, extending this year’s worst slump among emerging-market currencies and prompting Standard Bank Group Ltd. to lower its forecast for South Africa’s exchange rate.
“We are adjusting our forecast for the rand weaker versus the dollar based largely on a more positive view regarding the dollar out to mid-year,” Bruce Donald, a Johannesburg-based strategist at Standard Bank, said in e-mailed comments. Standard Bank sees the rand trading at 9.20 per dollar by mid-year, compared with a previous forecast of 9.
While U.S. data yesterday showed durable goods orders climbed the most since September and new home sales capped the best two months since 2008, South Africa is set to post a 13th straight monthly trade deficit in February, according to economists in a Bloomberg survey. The dollar gained today against all but one of its 16 most-traded peers, according to data compiled by Bloomberg.
South Africa’s currency traded 0.5 percent weaker at 9.2951 per dollar as of 3:51 p.m. in Johannesburg, bringing its retreat this year to 8.8 percent. Yields on benchmark 10.5 percent bonds due December 2026 dropped one basis point, or 0.01 percentage point, to 7.44 percent for a rise of 15 basis points this year.
The nation’s trade shortfall probably narrowed to 12.5 billion rand ($1.3 billion) in February from a record 24.5 billion rand the previous month, a report tomorrow will show, according to the median estimate of 10 economists. Private- sector credit growth likely contracted to 8 percent, from 8.6 percent, while producer inflation slowed to 5.6 percent, from 5.8 percent, separate reports may show.
“Bond and currency traders could be more focused on the trade data due to the consequences that a deeper deficit could have on the currency and inflation,” Quinten Bertenshaw, a Johannesburg-based analyst at ETM analytics, said in e-mailed comments.
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