19 Oct 2017

Week Ahead: Weak economic growth backdrop expected to result in a deterioration in fiscal indicators in 2017/18

Annabel Bishop

Chief Economist

Most emerging market currencies weakened over the course of the week but the rand was the worst performer

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

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

Figure 2: USDZAR

Most emerging market currencies weakened over the course of the week but the rand was the worst performer, out of a basket of 24 emerging market currencies, having weakened by 3.1%. The rand’s performance can be ascribed to a combination of domestic and external factors. Domestically, political events relating to the Cabinet reshuffle this week served to further raise perceived policy uncertainty. Externally, the US$ gained traction following Senates adoption of a fiscal 2018 Budget resolution which enhances the prospects for Trump’s tax reforms. 

In the week ahead, the rand is expected to trade in a range of R14.20/USD – R13.20/USD, R16.70/EUR - R15.70/EUR and R18.50/GBP - R17.50/GBP.

Figure 3: Purchasing Power Parity value of the Rand vs USD

Download Full Report

Read the full article by selecting download