The ZAR Exchange Rate Thread

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Solitude said:
That's very interesting YingYang. Thanks for sharing.
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No problem

Also just to add, there are two other factors which influence the currency values significantly and that's banks and billion dollar hedge funds. Banks not so much, but those hedge funds have so much money that if they want to drive a currency in a certain direction there's very little stopping them.

This why you'll sometimes find big jumps or drops for no apparent reason - well its not apparent to us, but they know why they're doing it :)
 
YingYang said:
First is the Profuction Price Index (PPI) Year on Year for the year ending November.
Second is the Production Price Index Month on Month for the month of November.

If the PPI (YoY) is higher than 6.4% than its good for our currency -> USD/ZAR will decrease slightly
If the PPI (MoM) is higher than 0.1% than its good for our currency. -> USD/ZAR will decrease slightly
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those are only local factors which may impact the Rand, the international factors are much stronger, for example, as you said, hedge funds drive the markets, and hedge funds look at groups of countries and not South Africa specifically, so if they move funds from emerging markets or African markets we are included.

what happens in commodities also can move our currency, and the factors that impact commodities are also global.

also what happens to the dollar is beyond our control as well, so if people flock to the dollar because of whats happening in europe, well then the rand will also weaken, all these things have absolutely nothing to do with domestic factors.
 
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Thor187 said:
YingYang you are a legend ! Thank you so much it's really helpful
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Cool :)

saturnz said:
those are only local factors which may impact the Rand, the international factors are much stronger, for example, as you said, hedge funds drive the markets, and hedge funds look at groups of countries and not South Africa specifically, so if they move funds from emerging markets or African markets we are included.

what happens in commodities also can move our currency, and the factors that impact commodities are also global.

also what happens to the dollar is beyond our control as well, so if people flock to the dollar because of whats happening in europe, well then the rand will also weaken, all these things have absolutely nothing to do with domestic factors.
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I think you missed this part of my post:

YingYang said:
So as you can see, it doesn't always mean that we've messed up which causes the rand to fall in value. Sometimes it is because the US has better performed in certain sectors, etc.
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What I meant with this is factors not involving us at all, also influence the dollar which in turn causes it to rise or fall against the ZAR.
 
yes which means looking at only local factors is meaningless and if you have to consider international factors then its no longer an easy exercise to dabble in forex
 
saturnz said:
yes which means looking at only local factors is meaningless and if you have to consider international factors then its no longer an easy exercise to dabble in forex
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Its not easy at all. In fact, I should probably add a disclaimer:

Guys, please do not use the explanation here as the basis for trading forex. Its much more complex than this. This was just to give you guys some background on what causes the exchange rate to fluctuate.

What I explained here is known as Fundamental Analysis, you cannot trade forex solely on this!
 
yes, but the point of that article was to highlight how things beyond our control can have a strong effect on our markets and if you don't have access to this information on your computer screen whatever position you take on the forex market will essentially be a blind gamble, or simply the incorrect decision.
 
The_Assimilator said:
Except I don't want to buy things manufactured in SA because the quality is appalling. The worst Chinese junk is better made than the "best quality" SA goods, and far cheaper, even when you take shipping into account. SA is never, ever going to be able to compete with China due to our government's idiotic labour laws and our workforce that is mostly unskilled and unmotivated.
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Same sentiment here.

Midnight_choir_drunk said:
If you don't support local manufacturers, you're only spiting and hurting opportunities for yourself. Australia remains competitive because they have something called national pride. The Buy Australian campaign did wonders for their economy. We tried to implement it here with the "proudly South African" campaign, but South Africans are extremely self loathing people and it never took off.
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If we support local manufacturers we are just hurting our own pockets. I would gladly buy South African if the quality was on par with international but it simply isn't. Our workers doesn't have the discipline or knowledge to manufacture anything to good standards. That's why the "proudly South African" campaign was a waste of money because it was simply advertising to try and peddle junk. We bought a Defy washing machine not even six months ago. Had to call support because the breather pipe fell down and it started leaking. Turns out they were securing it with a flimsy cable tie without even warning you that you have to be very careful with it.

Midnight_choir_drunk said:
And South Africa manufacturers loads of very competitive and quality products. Look at the motor industry here for example.

There nothing to admire about the Chinese work ethic. Cold discipline and abusive "hive mind" propaganda has whipped the humanity out them. People are frankly better off dead with that quality of life. They're hardly sentient and self aware. There is a line we have to draw between being successful at all costs and maybe allowing some space to people to enjoy their lives.
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The motor industry doesn't supplement all the other junk. And it isn't so good either. We bought a Volkswagen that kept on stalling. It turned out that a rag was left in the petrol tank probably as intentional sabotage during the strike that was going on. My brother has a bakkie where the wheel simply fell off. There was a design flaw where a part failed and they replaced it with an aluminum one that later failed. I wonder where that was made. We have had a couple of recalls in recent years on motor vehicles that had safety flaws.
 
Commercial bank rates up to R50K:

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Midnight_choir_drunk said:
Not to mention it makes South Africa a really cheap destination to travel to right now, which boosts tourism and again is good for the economy.

A strong Rand seriously hurts our competitiveness. Only an idiot would want that.
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That is just plain untrue in any economic sense. A weak currency means de-industrialisation will take place, manufacturers see little benefit in investing in companies over here because the profits will mean squad, not to mention the retarded labour laws, lack of infrastructure and a non-functional power grid. Had the rand been stronger then SA companies (who make most of their profits out of SA) would invest locally as opposed to abroad.

Mike Shussler explains why! (good economic piece )
http://businesstech.co.za/news/general/51715/why-a-weak-rand-sucks-economist/


It is not idiotic, unless you're uninformed.
 
Haha, 12.06 to the dollar, it's predictable. It's gonna be worse after the weekend : 12.50 or worse to the dollar. I predict 15 to the dollar by the end of the year, if we're lucky.

SARS doesn't care. They will bill more VAT. They're screwing up the economy and will charge for screwing the economy.
 
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