Week Ahead: Manufacturing production likely to continue underperforming on weak domestic demand conditions

05 Oct 2017

Annabel Bishop

Chief Economist

The US$ index steadily gained this week reaching its highest level since late July.

Figure 1: SA Monetary Policy Committee (MPC) meeting dates for 2017

Rand, currency outlook for the week ahead and foreign flows:

Figure 2: USDZAR
The US$ index steadily gained this week reaching its highest level since late July. The recent batch of US economic data releases that have signalled resilient conditions, and expectations of the Trump administration pushing through tax reform have reinforced expectations of another interest rate hike occurring in December (see figure 12). The stronger US$ has weighed on the performance of emerging market currencies, with the rand weakening by approximately 1.23% over the past 5 days.
In the week ahead, the rand is expected to trade in a range of R14.20/USD – R13.20/USD, R16.60/EUR - R15.60/EUR and R18.50/GBP - R17.50/GBP.

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