ZAR Forex Report – After the riot, peace and quiet

On the 8^th day of the 8^th month, Jacob Zuma survived a no-confidence vote for the 8^th time.

The Rand flirted with the idea that the vote could go against Zuma, although it was not expected. In the lead up to the secret parliamentary vote, the ZAR strengthened to as low as 13.15, before immediately weakening by over 1% as the results were released.

The Rand went from the best performing currency on Monday to the worst performing emerging market currency on Tuesday.

ZAR opened on Tuesday morning at 13.21 against the USD, and 15.61 and 17.24 against EUR and GBP respectively – by close, the currency was trading at 13.44 against the USD, after going as high as 13.54 and at 15.77 and 17.46 against EUR and GBP.

Adding to the weakness were comments from Donald Trump warning that North Korea will be met with fire and fury, among other things. The measuring contest between the two leaders set off risk aversion in global markets causing emerging markets to weaken. The Rand closed Friday at 13.41 against the USD, as local markets focused on the Moody’s rating review which would happen later Friday evening.

At the 11^th hour, Moody’s decided to postpone their rating decision, which resulted in a placid market. The Rand strengthened through the day as no news equalled good news, closing at 13.31 against the USD on Monday.

We are expecting a quieter week with no major events on the global scale and the US-North Korea standoff (hopefully) fading away. On the local front, Moody’s is expected to release and economic update later today.

Also look out for SA retail sales figures for June this week along with UK inflation, and the ECB minutes towards the end of the week.

ZAR FOREX RATE

USDZAR  = 13.3143

GBPZAR  = 17.1765

EURZAR  = 15.6520

AUDZAR  = 10.4460

NZDZAR  = 9.69725

CADZAR  = 10.4591

CHFZAR  = 13.7105