Rand Report: Brexit spooks the markets. Image credit: AdobeStock
Rand Report: Brexit spooks the markets
(Partner Content) The emotional back and forth with these Brexit negotiations have put the markets on edge, with big swings seen with all currencies associated with the GBP.
Rand Report: Brexit spooks the markets. Image credit: AdobeStock
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Over the past week our screens have been graced by numerous headlines pertaining to the ongoing Brexit rollercoaster. First it seemed there was no deal anymore, then a few days later we saw progress with Boris set to meet the EU negotiator. The emotional back and forth with these Brexit negotiations have put the markets on edge, with big swings seen with all currencies associated with the GBP.
Apart from that, news broke late last week of US President Donald Trump testing positive for COVID-19. This sent the USD on a downward spiral and the stock indices took a hit as well.
However, as the new week kicked off, the fears associated with Trump’s illness had subsided and the markets came roaring back to life. There seemed to be a bit of positivity around Brexit as well, as the GBP picked up slightly in Monday trade.
Data-wise, the past week saw South African unemployment hit 23.3%, where the market was expecting numbers closer to the 35% region – this was obviously positive, but at that point in time all eyes were focused on Brexit, or the lack of progress on this front, thus the ZAR did not react too much. And although headwinds remain to the SA economy, the rand has not taken too much strain.
There isn’t much to expect locally on the data side of things in the coming week, so one should look to global headlines to determine the direction of the currency.
On the global front, tensions remain with the US presidential elections looming and Brexit negotiations still facing many hurdles. These two major political events will without any doubt cause volatility in the weeks ahead and one should keep a close eye on any developments in this regard.
Market event calendar
Tuesday 6 October
- EUR: European Central Bank (ECB) President Lagarde speech
- US: Fed Chair Powell Speech
Wednesday 7 October
- US: Federal Open Market Committee (FOMC) minutes
- US: Initial jobless claims
Thursday 8 October
- UK: Bank of England’s (BoE) Governor Bailey speech (GBP)
Friday 9 October:
- UK: Gross Domestic Product
