Rand surrenders its gains as consumer confidence drops to lowest in 35 years

JOHANNESBURG – The rand on Tuesday surrendered gains it had made earlier in the week after weakening more than 1 percent as consumer confidence plunged to a 35-year low.

The rand also eased against all the G10 currencies after EU officials warned that economic recovery would take longer than anticipated.

FXTM’s Lukman Otunuga said the rand stumbled on global growth concerns and rising coronavirus cases that overshadowed the recent string of positive economic fundamentals from major economies.

“The local currency continues to battle with soft data and a gloomy growth outlook,” Otunga said. “If the pending manufacturing production and business confidence data print below market expectations, this may hit the rand further.”

The FNB/BER Consumer Confidence Index yesterday showed that consumer confidence tumbled to levels last seen in 1985 during the second quarter of 2020 due to the halt in economic activity in the three months to June.