The rand has lost more standing in early trade on Wednesday against the US dollar. Picture: IOL
The rand has lost more standing in early trade on Wednesday against the US dollar, according to Reuters calculations.
At 9am, the rand traded at R19.31 against the dollar, about 0.4 percent weaker than its previous close.
The rand is trading at R20.26 to the euro.
DOWNWARD TRAJECTORY
It should be noted that the dollar last traded around 0.1 percent stronger against a basket of global currencies. The rand has been struggling and has been on a downward trajectory this week, trading against a robust dollar to sit bear 2.4 percent weaker since the start of the month, according to Reuters.
"The rand continues to feel the pressure from the strong dollar and general risk aversion driven by the rate hike fears," said Andre Cilliers, currency strategist at TreasuryONE, adding that markets are on the fence about whether the US Federal Reserve will hike interest rates again this year.
"Bets that the (South African Reserve Bank) will have to hike further are on the rise, and (this month's) big hike in the petrol price is likely to raise inflation fears."
According to economists and wealth managers, the economy has had a few weeks of mixed news.
Old Mutual Wealth Investment Strategist, Izak Odendaal said: “As usual there is a lot to worry about, but there are also reasons to be a bit more upbeat.
“The economy grew more than expected in the second quarter. Stats SA data on real gross domestic product (GDP), the broadest measure of economic activity, showed growth of 0.6 percent between the first and second quarters.
“The official numbers are no longer annualised, but if they were, it would amount to 2.4 percent. This was better than expected and shows an acceleration in growth from the first quarter, despite the ongoing headwinds of load shedding, logistical bottlenecks, high interest rates and lower commodity prices.”
Odendaal states that what is really encouraging is the strong increase in fixed investment, albeit from a low base.
“Fixed investment spending grew 3.9 percent in the quarter (not annualised), accelerating steadily in the past few quarters. Most of this increase comes from the machinery and equipment category, probably largely related to investment in alternative sources of electricity.”
The Department of Energy and Mineral Resources announced yesterday that petrol and diesel are set for more steep increases in October 2023.
This is after September’s brutal fuel price hikes.
According to the department’s official statement, petrol will increase by between R1.08 (for 93 Unleaded) and R1.14 (95 Unleaded) from today, while diesel prices will go up by between R1.93 (low-sulphur 50ppm) and R1.96 (500ppm).
Following these increases, a litre of 95 Unleaded will now set you back R24.96 at the coast and R25.68 in the inland regions, while 93 Unleaded will rise to R25.22.
The even steeper diesel increases will see the wholesale price of 50ppm rising to R24.51 at the coast and R25.22 inland, while 500ppm will cost R24.29 and R25.01, respectively. Keep in mind that this excludes the retail margin, which is usually around R2 depending on the outlet, as diesel is unregulated.
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