Lots of -10% stoplosses still to be hit ( in usd ) from march last year. So maybe a bit of volitility and then a bit of strenght when anglo an bhp give results. I am normaly wrong when forcasting the rand , so who knows?
Most EM's in same boat. Some have imposed capital controls, others have increased interest rates to somewhat stem the bleed. QE and 0 interest rates in developed countries ushered in unadulterated capital inflows, governments fed at the trough and now, with tapering, capital is flowing out and countries with budget deficits and not so strong balance sheets are feeling the pinch. Add to this our weak economy and you have a good recipe for a weak Rand for quite some time.omo
add to that something like R8bn in bond sales in the last couple of weeks by foreign investors - is guaranteed to introduce volatility. I guess we now see the effects of QE easing. Institutions liquidating their bond purchases as the cheap loans pool starts to dry up. on the flip side though, at this rate, we should be able to make a sizeable dent in that R80bn current account deficit - providing those pesky miners could stop striking, of course.
I recall our finance minister recently questioning whether our business leaders have the savy to realocate resources to different businesses that can take advantage of a weaker Rand. Simple example given was tourism. SO, it seems to me he is saying he is not likely to intervene, it will be long term and we will need to find new favourite shares. The fact that prices are holding up is possibly giving us a time window. OMO.
I havebeen involved in rand pound exchange rate for over 30 years now .back in 1981 it was 1.8 rand to a pound and now it is 18.there were a few little recoveries here and there but the overall trend is devaluation.I have never truly understood or accepted the various explanations for this trend that many learned analysts have put forward.not trying to start a debate but I am convinced that stronger currencies and bigger economies have a vested interest in ensuring this trend continues.take a n example of dollar.if u print more of them u would expect devaluation but the opposite took place.USA basically printed themselves out of recession.rand will continue devaluation against major currencies .investigating that in mind
What's difficult to understand here? Contagion from wider emerging market asset sales , de-tapering equals investors expect US interest rates to rise and so they move out of riskier emerging market assets. That is us. SARB cannot ( like the Turks!) kneejerk rates upward= slower rate increases in RSA more likely despite what the market is thinking ...the World is waking up after the worst hangover you have ever seen - no one wants cheap and quick food - they want Mom's cooking ( Janet "Yellen" is "whispering" - "come home for dinner")
Partridge, during time of currency volatility, the bond market is extremely active. Yields goes up, thus making bond attractive to purchase. Whilst these bonds are redeemable in the future, coupon payment still needs to be made, based on new yields. How is the govt going to finance that additional cash outflow based on new yields when we are currently running budget deficits? Thus the only way was to hike interest rate.
Am glad the reasons are so simple.I do not trade fore.balls not big enough to be a trader but I have invested in overseas over a long period of time.some of the business I am in do nothing special but because rand consistently devalued my divs capital gain have been very rewarding