The ZAR Exchange Rate Thread

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Johnatan56 said:
You think the big Mac index is objective? They are not the exact same product in SA vs USA, so can't compare.
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Swa said:
It's not only the Big Mac index. And it cannot be so different as to allow a 67% discrepancy.
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Yep. Just renewed my PS plus membership and it was cheaper to use my SA account than my UK account for the exact same item. £37 (R750+) vs R561. The rand is undervalued.
 
signates said:
Yep. Just renewed my PS plus membership and it was cheaper to use my SA account than my UK account for the exact same item. £37 (R750+) vs R561. The rand is undervalued.
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That must mean that the USD is undervalued too by that logic.
 
Johnatan56 said:
Money supply is supposed to double every 10 years, just please note that when you think the numbers are huge (and yes, they definitely are, they're doing it at more than double the rate of what the previous norm was).

This reddit post has a pretty good explanation on it:

You can of course find other sources that will corroborate it. It's not really a problem that there's more cash.
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So while I agree that ordinarily inflating the currency is the norm in lockstep with/as GDP grows.. when you do so when GDP isn’t growing especially to cater for debt or spur investment it’s a risk move that doesn’t work out most of the time.

One reason I mentioned it being a reserve is simple.. that’s one of the only reason inflating in a downward spiral has worked for them(usd being used when the US isn’t involved) but if you track IMF, world bank etc they all investigating facilitating independent trade in various forms with competing SWIFT like system.

In fact one of the biggest things getting pushed by Biden is heading back to multilateral organizations and hoping they regain the same clout obliterated by Trump.

Anyway my point was simply that we not suffering as much because the reference is itself in a declining state as it’s been for last few decades.. but at a rate far higher than ours lately.

If you watch economic news you will see there is a slow growing consensus from Aus to EU that we headed into a EM run much like post 2009 as a result. Whether SA better positioned this go round is what I wonder.. else we will suffer declines irrespective of debt situation.
 
surface said:
Wouldn't this heavily affect tourism & exports ?
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Seemed to do just fine at even R3/$.

One can argue a slightly undervalued currency may be beneficial but for a country that doesn't have a strong manufacturing sector it's more of a hinderance for imports/exports.
 
Swa said:
Seemed to do just fine at even R3/$.

One can argue a slightly undervalued currency may be beneficial but for a country that doesn't have a strong manufacturing sector it's more of a hinderance for imports/exports.
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I reckon the AU trade deal is a game changer in this respect if and only if investment strike is over.

While SADC has meant we’ve been able to sell into these markets for a while now.. our neighbors aren’t exactly as profitable markets other parts of Africa.

The thing to worry about is that if SA isn’t performing as well or makes the investments it’s needs soon, we will be swamped with West Africa manufacturing, East Africa IT etc.
 
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This the graph that I always find interesting.. this is the dollar currency strength and while I doubt we headed to another peak like 2001, you know that period after.. I suspect that’s what’s coming as there will be a push into EM.

Ie they can’t keep QE nonstop since 2015/6 without issues. Some speculate that they can keep going irrespective but I dunno.. others speculate the current is the new bottom but as they getting left out of multilateral orgs, the trade use is diminishing.

You can read about that here: https://www.tradingview.com/chart/DXY/piUqHIWb-Dollar-Is-A-Massive-Drop-Or-Bear-Trap-Coming
 
krycor said:
View attachment 962570

This the graph that I always find interesting.. this is the dollar currency strength and while I doubt we headed to another peak like 2001, you know that period after.. I suspect that’s what’s coming as there will be a push into EM.

Ie they can’t keep QE nonstop since 2015/6 without issues. Some speculate that they can keep going irrespective but I dunno.. others speculate the current is the new bottom but as they getting left out of multilateral orgs, the trade use is diminishing.

You can read about that here: https://www.tradingview.com/chart/DXY/piUqHIWb-Dollar-Is-A-Massive-Drop-Or-Bear-Trap-Coming
Click to expand...

Remember that DXY is the USD against developed markets (mostly the euro). The USD gains generally against most EM currencies due to inflation differentials over time. You can see the difference in the US St Louis Fed dollar indices, they have trade weighted dollars against developed markets and EM.
 
Very very important level at the moment - could swing up or down, but I dont think it is likely to stay where we are now for much longer. My bet is up based on monthly timeframe trend

Currently buying, target 16 odd, anything under 15 is virgin territory

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usdzar20201203h1.PNG
 
EmsUFx3XcAIAdo1.jpg
 
Strengthening again today..R20.23 to Stirling.

See sawing since early Nov US elections fallout/unsurety and final Brexit negotiations hanging on a knife edge..
 
1 United States Dollar equals
15,05 South African Rand
08 Dec, 11:14 UTC ·

Are we headed below R15 to the USD?
 
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