USD/ZAR trades near 3-week peak as SA faces severe power cuts

The South African Rand retreated against the US Dollar on Tuesday, as South Africa experienced the most severe power cuts on record.

State utility Eskom reinstated the worst rolling blackouts on record, which resulted in up to 12 hours of power cuts for the majority of households per day.

“With the increase in generation planned maintenance, as previously communicated and the loss of a further two generation units today, Stage 6 loadshedding will be implemented from 05:00 on Tuesday until further notice. Overnight, a further two units at Lethabo and Matla power stations will need to be shutdown for urgent repairs,” Eskom announced on its website.

In terms of macro data, Rand traders will be paying attention to South Africa’s GDP growth figures for the second quarter, due out at 9:30 GMT today.

South African economy probably grew at an annualized rate of 1.1% in Q2, according to market consensus, following a 0.2% growth in the first quarter. The latter has been the slowest rate of expansion since a contraction was registered in the first quarter of 2021.

In quarter-on-quarter terms, GDP is expected to have expanded 0.1% in Q2.

As of 8:49 GMT on Tuesday USD/ZAR was edging up 0.40% on the day to trade at 19.1949. Earlier in the session, the exotic Forex pair went up as high as 19.2673. The latter has been the pair’s strongest level since August 15th (19.2972).