The ZAR Exchange Rate Thread

maumau

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Got this in an email today, data generated by Investec. It makes an interesting read

Personally I would swap the probabilities between the base case and lite domestic downturn case

View attachment 697591
I don't understand that thing. Do they think ZAR will weaken or will it strengthen before it weakens again? Say over the next 6 months.
 

Segg

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I don't understand that thing. Do they think ZAR will weaken or will it strengthen before it weakens again? Say over the next 6 months.
So looking at their prediction (Base Case) it will recover to around 14.30 before strengthening to 13.90 by year end, subject to the conditions happening in the description below the base case figures (which is exactly why I think the lite domestic downturn case is way more likely)
 

krycor

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Just not sure on Q2 Gdp numbers..

No load shedding but there was job cuts, elections, low inflation.. I dunno, off a big retraction in Q1 with load shedding maybe we get out of jail this go round unlike last year?

VAT or some other tax announcement will be interesting in mini budget in October too as they like announcing coming changes ahead of feb. I dunno, feels like we circling the drain, expenses far exceeding income that they need to somehow increase. We know medical credit likely dropping but that’s kinda spoken for with NHI.
 

Swa

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Well let's be honest. Our GDP didn't really grow as such. It was mainly supported by mining from a weak Rand ironically. Our most important sectors transport, construction and agriculture were negative. Manufacturing grew by only 2.1%. The rest of the sectors are sort of circulatory and expected to "grow" in a bad economy. As soon as people start analysing this they'll come to the conclusion it's all smoke and mirrors.
 

krycor

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Well let's be honest. Our GDP didn't really grow as such. It was mainly supported by mining from a weak Rand ironically. Our most important sectors transport, construction and agriculture were negative. Manufacturing grew by only 2.1%. The rest of the sectors are sort of circulatory and expected to "grow" in a bad economy. As soon as people start analysing this they'll come to the conclusion it's all smoke and mirrors.
Still better than what happens in the US though.. they publish and celebrate predictions and when actual and corrections come it’s swept under carpet.

Kinda while recession is found 6-9months post fact there.. here the numbers are a bit more reflective.
 

krycor

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So.. 2nd US interest rate cut,
QE round 4in the US signaled, similar happening for EU.

Watch and wait I guess? Every recession related tracking has triggered so not surprised they throwing money at it, the American way.

I see Trump is trying hard to make his only options dictator or war to distract/delay indefinitely the election? Fun times..
 

Lupus

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I see we dropped down to almost 15 again after being at R14.60 for awhile. The volatility of the currency is annoying
 

StrontiumDog

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So.. 2nd US interest rate cut,
QE round 4in the US signaled, similar happening for EU.

Watch and wait I guess? Every recession related tracking has triggered so not surprised they throwing money at it, the American way.

I see Trump is trying hard to make his only options dictator or war to distract/delay indefinitely the election? Fun times..
If a recession hits the US, will we end up feeling just as much pain as they will? In the event of a recession and if one has a diversified portfolio, is that portfolio better in offshore markets vs keeping it here in SA?
 

krycor

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Recession thing depends on how they handle it.. if they do what they’ve done in recent years ie cheapen money and not let their economy faulter/crash then yes, SA and every emerging market will sink deeper in trouble.

I reckon this may be the last time they can buy their way out and if they do, they can’t have a war anytime soon as they won’t be able to fund and extended war. I’m pretty sure opponents are aware of this.
 
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