load shedding eskom rand

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Can the Rand continue its rise against the major currencies?

The past week has been a very volatile and confusing one for Rand analysts. It started on Monday when the market was in “risk on” mode, with investors looking to capitalise on improved sentiment throughout the world. This quickly changed on Tuesday when trade war rhetoric flared up again as the US and China implemented additional tariffs on each other. This caused an emerging market sell-off, reversing all previous Rand gains. Since then, however, the Rand has been on the up.

load shedding eskom rand

Photo: Pixabay

The Rand weakness last Tuesday was short-lived and it was offset by some major Pound weakness. The drop in the GBP stemmed from the resignation of Boris Johnson, as well as the Brexit Minister. These resignations were in response to the new Brexit White Paper presented by Theresa May. The GBP weakened against most currencies until Friday, when the steam ran out for traders selling the Sterling.

The market has been moving sideways since then, with traders waiting for some concrete news before taking any positions. There is currently some negative sentiment towards Turkey and its president Erdogan; traders may use the Rand as a proxy for the Turkish Lira, which could lead to Rand weakness.

The main point of focus for the new week will be the local South African inflation data out on Wednesday. This will be followed by the SARB’s interest rate decision on Thursday. Both these events will cause volatility for the Rand. In the UK, Theresa May faces increasing headwinds regarding her Brexit plan – any news on this front will cause major volatility.

Date What’s happening? Why it’s important
Tuesday 17 July UK Average Hourly Earnings Not expected to change much, but if it does improve, we can expect GBP strength and in effect, ZAR weakness.
Wednesday 18 July SA Inflation Rate data


UK and EU Inflation data



The consensus is that inflation is moving to the top of the range. This is not good for the country, but it could indicate that the SARB will raise interest rates in the future.


If UK and EU Inflation Data improves, we can expect ZAR weakness in relation to these currencies.

Thursday 19 July SA Interest rate decision Although the market does not expect the SARB to raise the prime interest rate, if this does happen, we will see dramatic volatility. Take note of the tone of the post-rate decision press briefing.
Friday 20 July Canadian Inflation data If Canadian inflation improves it would indicate similar economies might have an uptick in inflation as well, this is a negative risk factor for the ZAR.


– Sebastian Steyn