Rand firms to 8-month high on trade surplus

Johannesburg – The rand raced to a more than eight-month high against the dollar on Friday, breaching the R14.00 mark for the first time since November partly due to data showing the fourth straight monthly trade surplus in June.

The rand climbed more than 1.5% to a session high of R13.8905 versus the greenback, its strongest since November 20, also reflecting broadbased dollar weakness after the release of US GDP data.

The currency breakthrough comes as South Africa announced its petrol price for August would decline by 99c, meaning motorists will pay R12.35 a litre for unleaded petrol inland and R11.87 on the coast.

READ: Huge petrol price relief

The US economy expanded less than forecast in the second quarter after a weaker start to the year than previously estimated as companies slimmed down inventories and remained wary of investing amid shaky global demand.

Gross domestic product rose at a 1.2% annualised rate after a 0.8% advance the prior quarter, Commerce Department figures showed on Friday in Washington. The median forecast of economists surveyed by Bloomberg called for a 2.5% second-quarter increase.

READ: US economy grew a less-than-forecast in second quarter

South Africa recorded a trade surplus of R12.53bn in June, down from May’s surplus of R18.37bn, the SA Revenue Service said on Friday.

“The country’s export market has been doing well this year,” Karl Götte, head of Standard Bank commercial banking, said in a statement on Friday.

He said the 11.3% increase in exports year-to-date was mainly due to the market fluctuations that have been seen globally this year.

“The rand experienced a weak few months at the beginning of the year and has recently improved. The weaker rand provided improved opportunities for exporters to sell their goods,” he said.

READ: Weak rand helps boost trade surplus as 2016 exports up 11%

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