The South African rand pushed ahead on Wednesday against the world's reserve currency after economic data indicated inflation rose at its fastest rate in nearly five years, according to Bloomberg.
After checking in at 6.1 percent in April, inflation advanced at 6.6 percent in May, according to the nation's statistics agency. Yields on bonds set for maturity in 2026 dropped 1 basis point.
"Regardless of even a bit of current strength from the current-account numbers, inflation is still expected to breach the target band for far too long," economist Gina Schoeman with Citigroup Inc. in Johannesburg told the news source during the midweek trading session, also noting the dangers of inflation against the national economy. "If they don't hike by 25 basis points in July they'll have missed the opportunity."
The rand rose about 0.6 percent against the greenback.
Moneyweb reports the nation is enduring its lengthiest labor strike ever at its mines, which threatens shipments from the nation. Mining accounts for roughly 60 percent of exports from the African nation. The current-account deficit expanded while pushing up pressure on inflation.
Risk Disclosure
The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided. References to over-the-counter (“OTC”) products or swaps are made on behalf of StoneX Markets LLC (“SXM”), a member of the National Futures Association (“NFA”) and provisionally registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM. StoneX Financial Inc. (“SFI”) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI does business as Daniels Trading/Top Third/Futures Online. SFI is registered with the U.S. Securities and Exchange Commission (“SEC”) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Adviser. References to securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to exchange-traded futures and options are made on behalf of the FCM Division of SFI.
Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.
© 2021 StoneX Group Inc. All Rights Reserved
