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Risk aversion puts Rand under pressure

Last week was a tough one for the Rand, with rates falling to record lows against the Dollar and Pound. The Rand fell almost 2% against the sterling and just under 1% against the greenback amid global investor sentiment. GBP-ZAR is currently at 21.88 and USD-ZAR currently sitting at 14.38.

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Looking forward, the Rand could fall to another record low today if global risk aversion continues to play a key role across financial markets. As seen in previous weeks, we expect rand investors to continue monitoring broad-based US dollar movements.

What to look out for this week? South African economic releases this week include CPI and Retail Sales data on Wednesday. Any results above consensus will be Rand positive. On Thursday, investors will be looking to see whether or not the Reserve Bank will hike interest rates before the Fed’s likely December hike.

-Andrew McNair

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