Rand looks to be steadying following the Easter Weekend

This Rand report is brought to you by Sable International

Before the Easter weekend the Rand received
some welcome news in the form of better than projected Chinese data – the results
show that the world’s second largest economy is recovering. The Chinese economy
grew by 6.4% in the first quarter of the year, the same pace of the previous
quarter at the end of last year. This comes in above market expectations of a
6.3% expansion.

Following sharp increases in fuel prices, the South African inflation rate rose to 4.5% in March, increasing for the second straight month. The Rand saw some much-needed gains through better than expected retail sales last week but trembled a bit on Wednesday after the South African Reserve Bank said in its biannual Monetary Policy Review that the country should expect to face power outages for the rest of the year. As a result, analysts have tipped a drop of 1.1% of the gross domestic product.

There isn’t much in terms of domestic data published this week for the ZAR ahead of general elections next month. Investors will be focusing on signs of the impending rebound of the global economy and more importantly the Chinese economy. Economists have advised caution surrounding the ZAR ahead of the general elections but are expecting an upturn in the local currency with a post-election reform.

Market
event calendar:

Tuesday 23 April

• US new home sales: Home sales in the US are
  expected to take a dip following their almost record high stats from last month.
  Forecasts predict a drop back to 0.63M from the 0.667M of February.

Wednesday 24 April

• Australian inflation data: Australia
  only releases inflation data once per quarter. Forecasts expect a drop to 1.5%
  from 1.8% in the fourth quarter of last year.
• Canada rate decision: After a dovish
  tilt from the Bank of Canada, officials see potential of growth without
  inflation as it is set to stick at 1.75%.

Thursday 25 April

• Japan rate decision: The Bank of Japan
  remained one of the most dovish banks in the world. They are set to leave their
  interest rate at -0.10%.

Friday 26 April

• US GDP: After a 2.2% increase in the
  final quarter of last year, the first quarter of the year saw slower growth;
  expectations are that it will drop to 2.0%.