At the start of last week, the rand steadied at 12.81/USD after Moody’s announced a one notch downgrade on SA’s foreign and local currency credit ratings, with the rating remaining investment grade. The announcement was in line with expectations.

The rand was also aided by a weaker USD in response to disappointing US CPI and retail sales figures. The USD index fell to the lowest level since 3rd October 2016. The Fed raised interest rates by 25bps as expected and maintained its rate hike path increase. The Fed noted it will be “monitoring inflation developments closely” but expects US disinflation to be transitory. Plans for the balance sheet unwind were also outlined.

Towards the end of the week the rand reacted to the revised mining charter which set out new black ownership, procurement and new prospecting rights requirements. The revised mining charter comes amid a technical recession and depressed business confidence which dropped to post 2008/09 recession lows.

The rand is expected to trade in a range of R13.30/USD – R12.30/USD, R14.80/EUR - R13.80/EUR and R16.80/GBP - R15.80/GBP.