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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.
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.
Tuesday 2 October
- Reserve Bank of Australia rate decision
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