The rand could fall to R19/$

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FxJalarupa

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Feb 23, 2016
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169
What's more important than the exchange rate?

Inflation both onshore and offshore...

If you have your money in hard currency then the exchange rate really means nothing as inflation is very low, you can still afford Dollar denominated items over time at very little inflation premium (zero in the tech sector)

Onshore inflation means higher interest rates due to inflation targeting by SARB - Last months print was brutal... I'd be surprised if we don't get another 50bps...

But then there is the FOMC on Wednesday and I have the feeling that any move from the SARB runs the risk of being diluted by the FED minutes... remember we have had non-event hikes in the past due to FED policy shifts... All n all exciting stuff... great opportunity to trade the volatility that this week brings as well as the moves that carry through into the end of the month...
 
P

Purply

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Great, thanks to the HAWKS and Gordhan saga the rand continues it's downward spiral, already a whopping 2.6% down for the day trading @ R15.95/$

Hello R16/$ , thought we wouldn't be seeing you again anytime soon, guess the puppets have other plans.
 
N

Nookie

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372
The rand would already be under R15/$ if it wasn't for this HAWKS nonsense.
 
O

Oopsie

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The Hawks head just kicked the ZAR over the cliff as Moody was looking on. He should be charged with financial sabotage but this will open a can of worms that could be even worse for the ZAR and the economy.
I can already see the headlines.
Zuma impeached.
Gupta brothers deported.
Gordhan resigns and exposes the "who whodunits" together with Jonas and others in his camp.
 
H

HavocXphere

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Oct 19, 2007
Messages
33,155
Oopsie said:
The Hawks head just kicked the ZAR over the cliff as Moody was looking on. He should be charged with financial sabotage but this will open a can of worms that could be even worse for the ZAR and the economy.
I can already see the headlines.
Zuma impeached.
Gupta brothers deported.
Gordhan resigns and exposes the "who whodunits" together with Jonas and others in his camp.
Click to expand...
That would be ideal. The more likely version: NEC issues decree that this will be swept under the rug to maintain some semblance of unity & that there will be hell to pay if someone speaks up. Then some random oke gets thrown under the bus as a scape-goat and Zuma retires "for personal reasons". Oh and the hawks get disbanded and a new unit gets formed named after some animal (again).

...and the rating agencies buy none of it.

On the plus side pretty sure the FX already has a downgrade priced in 90%.
 
P

Paul_S

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Jun 4, 2006
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5,550
It looks like pretty much everyone except Gordhan is trying to crash the Rand. :(
I hope there is some bad news for European and North American markets otherwise I don't see the Rand strengthening any time soon.
Maybe an interest rate hike by the MPC tomorrow will help investor sentiment a little bit?
 
O

Oopsie

Senior Member
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Messages
817
The ****e is flying already. Some minutes ago Jonas admitted on video that a Gupta offered him the job.
Vygie Mentor tweeted to Jonas: The truth shall set us free.

The ZAR is pricing in Gordhan's resignation.
 
O

Oopsie

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Jun 16, 2008
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817
Hopefully Gordhan will not get gatvol and resign. The ZAR is gaining tonight and if the SARB raises the interest rate by 25 bps, we will see money flowing back in.
Not sure about the political situation as the NEC may be looking at Zuma and his shenanigans with the Guptas as we speak.
Zuma has had lessons from his Uncle Bob and has devised a plan to hijack SA as his own.
He forgot that we have a democratic country and his stupid unschooled attempt will be his demise. We will see this sooner than later.
 
K

krycor

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With the Gupta hand being shown, I'm beginning to suspect they will have to pay that 200 bar tax quite soon haha..
 
Swa

Swa

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Mike Hoxbig said:
There seems to be a lot of fear mongering around this junk rating. SA was rated junk before 2001 and life went on fine. It's just that we're not going to have it as good as we did for the past decade or so. It's not like there's no way out once you hit junk...
Click to expand...
I'm getting the feeling some people are actually milking this "junk status" and want to fear monger for their own benefit. Despite what's going on with our government our investment opportunities are far from junk. It's probably for this reason the agencies don't want to downgrade to junk because it won't reflect our real economy. People also miss that "junk" status is actually still high up on the ratings list. The next notch is where market speculators enter which will cause the rand to strengthen.
 
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Paul_S

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Messages
5,550
Purply said:
I get the feeling a lot of people don't really care as it somehow doesn't "affect" them. No idea how that logic works.
Click to expand...

I had that conversation with an educated individual yesterday.
His assumption is that the Rand sliding won't affect us much because we produce most of our own products and food locally.
Then I explained to him that a lot of the local production and manufacturing relies on foreign equipment and input materials/components which need to be imported and South Africa just happens to be a nett importer.
 
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