Sat. Dec 14th, 2019

Local data and the China-US trade negotiations dominate movements in the ZAR

The Rand maintained its upward momentum during the early parts of last week following Moody’s ratings announcement.

local data and the china us trade negotiations dominate movements in the zar 1024x683 - Local data and the China-US trade negotiations dominate movements in the ZAR

This Rand report is brought to you by Sable International

Weaker than
expected local data (consumer confidence and producer manufacturing data
released on Tuesday) weighed down the Rand’s upward trend. This, together with
the return of a bearish outlook on emerging markets (EM) caused the ZAR to
trade mixed on Wednesday as renewed uncertainty regarding the outcome of trade
talks between the US and China reared its head again.

This trend reversed on Thursday after China and the US indicated that they will look at phasing out trade tariffs. EM currencies buoyed as risk appetite returned to the markets. This caused the Rand to regain most of Wednesday’s losses, despite weak local data, specifically business confidence and manufacturing production data.

802a1ef7 2019 11 12 the rand report - Local data and the China-US trade negotiations dominate movements in the ZAR

A mixed session
on Friday then led to a return of positive sentiment as the US-China trade
negotiations provided some positive feedback. This trend continued until
yesterday.

The Rand weakened on the back of a stronger British Pound. This was mainly driven by British politics as the prospects for the current Brexit deal improved.

Market event calendar

Tuesday 12
November

  • British unemployment data  

Wednesday 13
November

  • British output and inflation data
  • SA retail sales
  • US inflation data

Thursday 14
November 

  • SA mining and gold production
  • British retail data
  • US inflation data

Friday 15
November

  • US import/export data

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