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There’s a potential perfect storm brewing for our suddenly trigger happy local currency, as a cocktail of domestic and international issues conspire against it.
Locally the political Sword of Damocles in the form of cabinet employees has traders twitching, not to mention the threat of negative GDP growth which would be a significant setback for investor confidence and the reputation of President Ramaphosa.
LISTEN: The rand in the eye of the storm
Overseas, it’s risk-off as trade wars continue to cause concern, Brexit still bores and concerns in equal measure, and Italy is suddenly at odds with Brussels’ lawmakers.
And then there’s the perplexing conundrum of interest rate policy from the Fed.
In December it was written that there would be 2/3 interest rate hikes; now we are facing ½ CUTS in the United States, pushing bond yields to lows not seen since 2017.
Extraordinary developments, described by David Gracey in conversation with Lindsay Williams.
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About the author
David Gracey
Head of Foreign Exchange and Fixed Income Trading
David has more than 30 years of trading experience in South African financial markets. He heads up the FX and FI trading desk, trading in both asset classes, and makes markets to clients in products associated with these asset classes. David also manages the risk associated with this function.
