Rand stronger as greenback weakens, and risk appetite remains high

The Rand traded mainly flat on Tuesday, ranging between R14.61 and R14.68 against the US Dollar, as uncertainty on the trade war between the US and China continues. Losses in the Chinese Yuan contributed to the mixed performance of Asian and emerging market currencies for the day.

Wednesday saw the Rand lose significant ground against the greenback, reaching its lowest level since early October at R14.83 to the USD. This comes amid an announcement that the unemployment rate in South Africa increased slightly in the third quarter.

The ZAR then bounced back on Thursday and Friday due to positive sentiment returning to US and European markets. This in turn improved risk appetite for emerging market currencies. On Thursday, the ZAR closed at R14.38 after opening the day at R14.66.

This came as the USD started to lose some ground against major currencies, especially the Euro. Positive performance from Asian and US stock markets also contributed to the positive sentiments on Thursday and Friday, as increased risk appetite drove demand for emerging-market assets.

The Rand continued to gain on Monday, closing at R14.18 to the greenback as positive sentiment continues. A slight pullback was observed during the morning trade on Tuesday. This trend can be expected to continue as the USD gains some strength on the back of a well-performing stock market.

Date	What’s happening?	Why does it matter?
Tuesday 06 November	SA Business Confidence	Indicates the long-term economic potential of South Africa
Wednesday 07 November	SA Foreign Exchange Reserves Brazil Inflation Rate Data	Higher forex reserves will determine the strength of the ZAR through improved buying power Brazil (a major EM) inflation will impact sentiment in EM markets
Thursday 08 November	China Trade Data German Trade Data SA Gold And Mining Production Data US Fed Interest Rate Decision	Improved trade data will impact the strength of the Yuan and subsequently risk appetite for EM assets  A major EU economy. Positive data will improve the overall prospects of the Euro Indicative of SA GDP performance Higher interest rates will pump value into the USD against other major currencies
Friday 09 November	Australia RBA Monetary Policy Statement China Inflation Rate Data UK GDP Data	Monetary policy will drive sentiment on the AUD Inflation will drive the long-term value of the Yuan Improved GDP will contribute to the strengthening of the GBP

– Justin Fortuin