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All eyes are on the US this week as tensions rise, electoral decisions are made and impending interest rates will likely be held at a constant. All this amidst increased pandemic chaos across the pond in Europe and the UK.
Although general market sentiment is that these volatile event markers have already been priced in, the degree that either Trump or Biden win by will move the USD. For example, a landslide victory for Biden could see a weaker Dollar in the coming week. The ZAR is currently trading at 16.15 against the Dollar, 20.91 against the Pound and 18.85 against the Euro.
Last week’s increase in the ZAR/GBP rate came as a surprise, following the negative news out of Tito Mboweni’s Mid-Term Budget Proposal Speech. This lift, however, can be attributed to the disarray coming out of the UK as Boris Johnson announced a second national lockdown and Brexit trade deal talks came to a standstill.
Back on home soil, South African Airways was given another bail out by the government to the tune of R10.5 Billion. This was met with backlash as the failing airline has been given a total of R57 Billion since 1994. Eskom has also made a public statement last week where it posted a net loss for the 2019/2020 financial year at R20.5 Billion. There will be an estimated loss of R26.2 Billion for the current financial year due to Covid-19.
Today is a big day for international markets and it will set the tone for the coming months as the world struggles to recoup lost momentum and GDP from the Covid-19 pandemic.
Market event calendar
Tuesday 3 November
- US: Presidential elections
Wednesday 4 November
- US: Balance of trade September
Thursday 5 November
- UK: BOE Interest rate decision
- US: FED Interest rate decision
Friday 6 November
- SA: Foreign Exchange reserves