Rand Report: Tensions increase around Omicron variant. Image: Canva
The outbreak of the Omicron variant will be felt across all sectors in South Africa but, most importantly, it will affect interest rates, economic grants and the fuel price.
Rand Report: Tensions increase around Omicron variant. Image: Canva
The new Covid variant will possibly threaten the country’s GDP recovery as a stricter lockdown in the coming weeks is feared. There was a notable increase in the producer price index, a leading indicator of inflation, thus interest rate hikes could be on the horizon.
After news about the new variant broke last week Friday, the rand weakened against all major currencies, most noticeably against the JPY(-3.07%), USD (-2%) and GBP (-1.36%). The relatively aggressive market moves were pushed into a deepened state on the JSE as there was low liquidity in the market due to Thanksgiving on Thursday and a half trading day due to Black Friday.
Across the US, the Dollar has been making large moves since 11 November, when the US released CPI data at 6.2%. This increased bond purchase tapering expectations.
This week sees the release of big employment data from the US, with the ADP employment change on Wednesday, which is expected to increase. This will be followed by US non-farm payrolls data on Friday, which is also expected to increase. Overall, it seems the US labour market is rebounding from the pandemic but should be closely monitored as the country faces a possible fifth wave of Covid infections.
Tuesday 30 November
SA: Unemployment rate
UK: Prime minister speech
Wednesday 1 December
UK: Band of England speech
Thursday 2 December
EU: Unemployment rate
Friday 3 December
US: Non-farm payroll
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