Sun. Sep 20th, 2020

Rand report: All eyes on the US ahead of the Jackson Hole Symposium

(Partner Content) Amplified scenarios are making the rounds in the markets as the US gears up for a rough week. This will, in turn, have a major effect on emerging markets like South Africa.

rand report all eyes on the us ahead of the jackson hole symposium 1024x683 - Rand report: All eyes on the US ahead of the Jackson Hole Symposium

The rand report is brought to you by Sable International

The rand kicked off the week with a relatively strong move after a moderately quiet week last week. This can be attributed to the major risk-on sentiment in global markets as news spreads about potential Covid-19 vaccines.

Monday saw a 1.33% move from R22.40 against the pound down to R22.11 GBP/ZAR. The rand is currently trading at R16.89 against the US dollar and R19.95 against the euro.

58ec4edd rand report graph 20 08 25 - Rand report: All eyes on the US ahead of the Jackson Hole Symposium
Image provided by Sable International

The relative strength in emerging markets can be seen as a byproduct of the upcoming Jackson Hole Symposium that will be held on Thursday. This meeting brings together the top economists and the Chairman of the US Federal Reserve, Jerome Powell. Powell’s speech will be the highlight of the event as the Fed’s view on a way forward, post Covid-19, will set the precedent for upcoming policy changes and the international market. The markets currently have a bearish outlook for the US Dollar leading into the Symposium due to recent months’ unique actions from the Fed in order to preserve the US economy with a “win at all costs” attitude. 

With another stimulus action on the horizon for the US, it is anticipated that this round of funds will be invested into riskier assets that will cause the US dollar to take further strain in an already pressurised environment. 

Data Schedule 

Tuesday 25 August

  • ZAR Leading business cycle indicator MoM – Forecasted as a slight decrease but relatively stable again post Covid-19

Wednesday 26 August

  • ZAR Inflation rate – Forecasted to increase, after a 15-year low in June, to 3.1%

Thursday 27 August

  • USD Jackson Hole Symposium (Speech) – Forecasted to have a dramatic effect on US Dollar and Gold

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