SONA in the spotlight this week as the Rand continues to struggle

(Partner content) The Rand tumbled towards the end of last week amid a strengthening Dollar, increased fleeing from emerging market currencies and weaker than expected business confidence.

sona in the spotlight this week as the rand continues to struggle 1024x683 - SONA in the spotlight this week as the Rand continues to struggle

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Before the coronavirus hit, the Rand was being driven up by global liquidity dynamics, with the top-hitting central banks pumping liquidity in the market, supporting the high-yielding currencies.

The Rand and the SONA

This week, the State of the Nation Address (SONA) takes the forefront of local news as load shedding continues to dampen the already struggling economy. Tuesday also sees the release of the South African unemployment rate; we can expect the headline figure to drop from a staggering 29.1% to 28.5%.

On Thursday evening, President Cyril Ramaphosa will be giving his third SONA at the opening of parliament. We don’t expect smooth sailing during the address as the EFF has threatened to interrupt proceedings to ensure that Public Enterprises Minister Pravin Gordhan gets axed from the Cabinet. 

It’s likely that most of the address will focus on the biggest challenge facing the government and country at the moment – Eskom and its constant power outages that continue to negatively impact the Rand and the economy. This comes after new Eskom CEO André de Ruyter’s warning that if operational efficiencies aren’t improved drastically, we can expect load shedding to continue for the next 18 months.

7d14a3fa weekly rand report graph 11 feb 2020 - SONA in the spotlight this week as the Rand continues to struggle

Market event calendar

Tuesday 11 February 

  • SA unemployment rate
  • UK balance of trade

Wednesday 12 February

  • SA retail sales
  • Eurozone industrial production

Thursday 13 February

  • US inflation rate
  • European Commission forecasts
  • SA State of the Nation Address

Friday 14 February

  • Eurozone growth rate
  • US retail sales

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