Tue. Oct 22nd, 2019

The Rand at the mercy of anti-Dollar movements

The Rand slumped towards the end of last week after the US-China trade war escalated once more.

the rand at the mercy of anti dollar movements 1024x683 - The Rand at the mercy of anti-Dollar movements

This Rand report is brought to you by Sable International

US authorities are planning to restrict Chinese investments and limit Chinese companies from trading on US stock exchanges. This has placed huge pressure on emerging market currencies and caused a risk asset sell-off.

The Rand found some relief after it was announced that Saudi oil production returned to where it was before the drone strike and that the US may ease up on Iran exporting its oil supply.

In South Africa, president Cyril Ramaphosa has promised that
the government will finalise a clear strategy to tackle the country’s economic
growth problems. The South African balance of trade figure for August was
released yesterday and we saw the trade deficit of R3.72 billion from July turn
around to a R6.84 billion surplus. The majority of the turnaround came from a
rise in mineral exports leading to a short-term rally for the Rand.

This week, the Rand will be taking cues from counter currency action and global risk sentiment in the absence of any top-tier data releases out of South Africa. Brexit is back in the headlines after Boris Johnson’s prorogation of parliament was ruled unlawful. The UK government has prepared the legal text of an updated Brexit deal that is expected to be made public over the next week.

b0a1bb62 2019 10 01 the rand report - The Rand at the mercy of anti-Dollar movements

In terms of data releases, the US jobs data is likely to
cause the most movement when it is released on Friday. It’s been forecast that
145,000 jobs were added to the US economy. Any deviations from this amount will
cause volatility for both the US Dollar and the Rand.

Market event
calendar

Tuesday 2 October

  • Reserve Bank of Australia rate decision
  • US
    ISM manufacturing PMI

Wednesday 3 October       

  • Japan consumer confidence

Thursday 4 October           

  • Australia’s balance of trade
  • US ISM non-manufacturing PMI

Friday 5 October

  • US balance of trade
  • US non-farm payrolls

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