James Paynter | Feb 12, 2019 01:48
As it so often is, after a cracking turnaround from the Rand, a bump back to reality arrives...
A weaker Rand is not always bad news though.
It brings some relief to those who are exporters, with a weaker the Rand giving more bang for their buck they get when it comes to inflows of foreign currency.
But it was a tough week for those who rely on a stronger ZAR...
...as local pressures took their toll.
Let's get into the review, as there's a lot to cover!
Here are some of the biggest events from the last week:
The big month of February is truly upon us - and there is still so much more to come
On the SA agenda, the next big one is the Budget Speech. This tends to be more of the cold, hard facts, like an income statement. Rather than Ramaphosa's SONA, which is more like an elaborate business plan.
On the subject of the SONA, Ramaphosa did seem to do a good job in laying out some quality plans, and perhaps glossing over some of the potential pain points for investors.
The key points from his speech went something like this:
These very positive points and plans laid out amongst other announcements meant that the speech was well received!
However, despite it hitting all the right notes, it really lacked deep detail and timelines for reforms.
For once, the Rand held its own during the speech, making its way through to R13.58 around the US close...
It had already been a tough week for the Rand leading up to this point, as concerns around Eskom had triggered the move of 40c to get to well over R13.50/$.
In other news...
The Rand closed the week around 13.60 to the Dollar, with an up and down week finally gaining some stability around that level...
A tough week, but not all is lost for the USDZAR as it still sits 100c stronger than where 2019 began.
With February rolling on to its second week, there aren't too many economic events this week, with US Retail Sales being the only one of note.
But that doesn't mean that it will be a quiet week while we wait for next week's Budget speech. Of course, there's still the trade war and Brexit to watch, and of course, Trump's twitter account.
But we won't be watching anything except the patterns of sentiment to give us and our clients with Rand exposures a clue as to where the market is likely to head in the short, medium and long term.
And we suggest you do the same if you have some exposures, and need a roadmap for expected movements.
We are here to help.
To your success~
Written By: James Paynter
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