The ZAR Exchange Rate Thread

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Conversation on highveld this morning. I almost pissed my pants...

Whackhead: At one stage the rand was stronger than the dollar
Jacob (black news guy): Really?
Whackhead: Yep
Jacob: Wow, we are living in the wrong era!
Whackhead: Umm, No Jake, you wouldn't have liked it back then... things are much better for you now :D

/queue fanie's wet pant
 
If R11.00 goes then the next possible stop is the high made back in October 2008 at R11.84.

I think time to bring some more money back....

Currently at R10.96/7
 
MKFrost said:
If R11.00 goes then the next possible stop is the high made back in October 2008 at R11.84.

I think time to bring some more money back....

Currently at R10.96/7
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There should be a soft limit at 11.25. Do not think it will offer the most solid resistance, anything like the R11.00 barrier.

10.77 atm.
 
chicken247 said:
Why am I seeing a touch at 10.30 for the erections?
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Very possible as last couple of attempts to cross above R11 fizzled out. R10.30 is a possibility but think it might be stopped in its tracks at around R10.50.

Next week is again a heavy news week for the dollar and thus far all indications are for a hike in their rates and this is supporting the dollar. So the Rand will have to do what it can this week as I fear next week is going to send it tumbling.
 
XennoX said:
OK. So what influences the value of the Rand? Is it purely our balance of trade and based off how much Rands people are buying?
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Far more complex, following links provide some insight into the major factors. Additional to this is also the movements that come from pure speculation i.e. those that have no fundamental basis except for the punting behind the move.

http://www.investopedia.com/articles/basics/04/050704.asp

http://www.mindxpansion.com/forex/factors_influencing_currency_exchange_rates.php

http://fxtrade.oanda.com/learn/top-5-factors-that-affect-exchange-rates

http://www.thisismoney.co.uk/money/markets/article-1619151/What-makes-currencies-strong-or-weak.html

http://unrealist.hubpages.com/hub/Factors-That-Influence-Currency-Changes
 
Thanks. So from a purely economic point of view:

  • Current Account (Balance of Trade)
  • Public Debt (The country's debt if I understand correctly)
  • The Inflation Rate
  • The Interest Rate

So then if I understand correctly (incorporating socio-economic factors here) the Rand is taking a hammering because of:

  1. Government's spending as % of GDP.
  2. Labour unrest in the country.
  3. Inflation figures that are worse than predicted.
  4. Dismal balance of trade. I believe in January we had a negative balance of trade of something like R26Bn where something more moderate like R6Bn was expected.
 
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Lack of confidence leading to capital flight or reduced capital inflow. Unrest is part of the cause of that, as is policy uncertainty (talks of nationalisation) as well as excessive red tape and inefficiency.
 
MKFrost said:
Bouncing on a trendline at the moment. If it can get through this R10.70/73 area we should go lower for a bit.
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Yeah I was thinking the same. Hopefully the news from the MPC is good.

If we do break through the 10.70 odd level where do you think we will end up? I am thinking we go down to around 10.60 levels unless we see some really positive news.
 
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Devill said:
Yeah I was thinking the same. Hopefully the news from the MPC is good.

If we do break through the 10.70 odd level where do you think we will end up? I am thinking we go down to around 10.60 levels unless we see some really positive news.
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We're through the trendline, now for R10.70. IF that goes I reckon R10.50 area. Strong support area there so not so sure whether we will be able to break through there quite yet. If we do then maybe R10.20 but think we will see a strong bounce long before then.
 
MKFrost said:
We're through the trendline, now for R10.70. IF that goes I reckon R10.50 area. Strong support area there so not so sure whether we will be able to break through there quite yet. If we do then maybe R10.20 but think we will see a strong bounce long before then.
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You think they will make any changes to the RR come tomorrow?
 
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Devill said:
You think the will make any changes to the RR come tomorrow?
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Doubt it, inflation is a little higher but not enough to justify another hike right now. The previous hike still needs to filter through to the markets and its effect on the inflation rate will only be seen around 2 to 4 months from now so I think they will hold off for now.

Only reason for them to do it now will be to try and strengthen the Rand which will be futile in any case. Also, the Rand has strengthened quite a bit so think they will hold off until later in the year.
 
I don't think we'll see a hike either, until they are sure the inflation will stay above 6%.
 
SARB rates decision at 15H00. An increase should boost the Rand but think all are in agreement that it ain't going to happen so wonder if it will send the Rand tumbling back above R10.80.
 
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