The Canadian Dollar is trading at 11.49 against the South African Rand today, down -0.18% with a YTD return of -0.45%. The currency pair’s open rate sat at 11.5151, similar to their previous close at 11.5153. CAD/ZAR day range will move between 11.48 and 11.53, their 52-week range is anticipated to fluctuate between 11.18 and 13.62.
After surging from the 11.00 level at the beginning of 2020, to a 5-year high of 13.52 in April, CAD/ZAR exchange rate has been on the bulls’ radar. CAD/ZAR has been experiencing a downwards trend since the beginning of January when the pair’s exchange rate was at the 12.00 support level.
After the announcement of the new coronavirus variant in South Africa, there were concerns that the Rand would suffer but the currency has managed to stabilize itself in spite of the spread of the variant, extended lockdown measures, and travel restrictions.
BNN Bloomberg reported that “the rand is headed for its biggest weekly gain since mid-December as investors warmed to signs that South Africa’s fiscal deficit may be lower than expected as tax revenue overshoots.”
This estimated overshoot of the tax collection budget in South Africa “could take some pressure off the National Treasury as it tries to reign in a fiscal deficit that’s ballooned due to the coronavirus pandemic.” The government is also taking advantage of the fact the debt issuance is higher than budgeted as there has been a strong demand to boost weekly sales.
Annabel Bishop, chief economist at Investec Bank said “there are some expectations that South Africa’s budget this month will see positive developments on fiscal consolidation” but “there is also marked room for disappointment as the borrowing trajectory is extremely high, and unlikely to be cut.”
By Surina Nath