SEARCH
Convert
or
Set Alert
BOE Bank of England GBP/ZAR Data and Graphs
Live currency Data and Graphs Live GBP/ZAR Data, Graphs, Statistics
Transfer Money Now Transfer Money
Transfer Money Now Cash and Travel Money

Australain Dollar and SA Rand Hit by Brutal Chinese Data

Chinese imports hit Rand and Aussie dollar

The pound sterling has surged higher against the South African Rand, Australian dollar and those other commodity currencies exposed to the Chinese economy.

Data shows Chinese exports fell 15% to 3.1BN in March, markets had been pricing in a rise of 12% to 40BN. A miss on this scale will of course hit markets hard.

Any slowdown in China will impact the likes of South Africa and Australia who rely on Chinese demand for their mining products.

The Reserve Bank of Australia (RBA) could well cite this deterioration as a reason to cut interest rates again.

  • The British pound to Australian dollar exchange rate (GBP-AUD) is seen a whopping 1.3 pct higher at 1.9300.
  • The pound to South African rand exchange rate (GBP-ZAR) is over a percent higher at 17.7635.

The weakness is being felt elsewhere to:

“The rand is at risk of pushing substantially weaker today following the terrible Chinese trade data released early this morning. From a close below 12.00, look for USD/ZAR to push to 12.10 or even 12.15. EUR/ZAR should push into the 12.80s. Major risks, meanwhile, come from EUR/USD this week as the dollar rally threatens to resume,” says John Cairns at RMB in Johannesburg.

The yuan's strength was one factor in March's 19.1 pct on-year decline in exports to the European Union and 24.8 pct drop to Japan.

Also worrying currency traders was news that domestic demand was also weak, imports into China shrank 12.7 pct last month from a year ago

“Beijing’s brutal trade figures have sparked a sell-off in the mineral-related stocks, and the overnight announcement from China has set the pace for the growth figures that are due out later this week,” says David Madden from IG in London.

Madden notes that the collapse in China’s trade balance on the month was so dramatic it left some traders wondering whether the figures were accurate, and other dealers viewed the dreadful numbers as a sign for further stimulus.

“The massive miss was partly blamed on lunar year adjustments and the trade data does tend to be volatile, yet it does not alleviate the fact that growth has slowed materially and that concern was reflected in the commodity dollars with Aussie and kiwi dropping more than 100 points off the session highs,” says currency analyst Boris Schlossberg from BK Asset Management in New York.

The ZAR is usually not as sensitive to data from China but will presumably play follow my leader points out Cairns.

Theme: GKNEWS