Week Ahead: June PMI figure will provide further indication

01 Jul 2018

Annabel Bishop

Chief Economist

of the health of the manufacturing sector during the Q2.18 period

Figure 1: SA Monetary Policy Committee (MPC) meeting dates for 2018

Currency outlook for the week ahead and foreign portfolio flows:

Figure 2: Purchasing price parity value of the rand
The domestic currency, along with most other emerging market currencies, was under pressure last week, as trade war fears continued to weigh on investor sentiment. Additionally, Moody’s Rating Agency said “(S)outh Africa’s economic growth prospects will be limited by weak business confidence while uncertainty around land and mining reforms remain a concern for investors”, further dampening the currency’s performance. The rand came very close to touching the R14.00/USD level.
 
At the time of writing the rand was trading at R13.80/USD, having depreciated by 19.5%, since February 2018.
 
In the week ahead, the rand is expected to trade in a range of R13.30 /USD – R14.30/USD, R15.60/EUR - R16.60/EUR and R17.70/GBP - R18.70/GBP.
Figure 3: Purchasing price parity value of the rand

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