ZAR Forex Report
According to Reuters, the consensus among economists is that President Zuma’s leadership has cost the country as much as $50 billion.
The upside from the NPA-Gordhan soap opera quickly disappeared last week and the Rand remained under pressure.
The Purchasing Managers’ Index fell by 2.7 points in October, suggesting a high probability that manufacturing production – and thus growth – will slow down in the next few months. USD/ZAR was unable to drop below 13.47 on Tuesday, however went as low as 13.33 on Wednesday.
Frustratingly, the ZAR’s gains following the state capture report were short lived – partly due to Trump’s chances of winning the election increasing, causing paranoia in emerging currencies, and also in part due to the remedial action suggested in the report.
Rand opened at 13.42 against the USD on Thursday as it started tracking global risks and markets again.
Odds from the bookies have increased from 70% last week to 83% at the start of the week of Hillary Clinton winning the election, following the FBI’s decision not to go ahead with the charges against her.
The market sees this as positive move and Wall Street gained as much as 2% after nine days of losses.
Following the optimism, the Rand, along with other emerging markets, also rallied and closed at a strong 13.34 versus the USD on Monday evening.
In early Tuesday trade, the markets were fairly quiet as the US took to the polls.
We expect the US election news to dominate all other events as the world will closely watch the results – a Clinton victory, will be seen as a Rand and emerging market positive.
A Trump victory will be synonymous with instability and turmoil.
In other news: according to Reuters, the consensus among economists is that President Zuma’s leadership has cost the country as much as $50 billion.
It was also mentioned that the ZAR can strengthen by as much as 15%, should the president step down before his term is over in 2019.
ZAR FOREX RATES
USDZAR = 13.4069
GBPZAR = 16.6590
EURZAR = 14.8215
AUDZAR = 10.3351
NZDZAR = 9.84135
CADZAR = 10.0407
CHFZAR = 13.7550
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