It’s a complete mystery to me why the ZAR remains so resilient, especially in light of the recent bond market sell off. EM are not performing well, and broad USD strength should also be counting against the local currency – yet the rand remains resilient, trading at close to 14.0000 to the USD for most of Monday. We all know that the rating agencies are set to pronounce on Friday – which in theory should keep the market nervous, and cause some ZAR weakness.

Common sense says that if we are downgraded (greater than 50% chance IMO), we should see a substantial outflow from foreign holders of local bonds, leading to pressure on the rand. I have to say that I would imagine that a fair degree of hedging has already taken place, as a downgrade should be anticipated.Therefore – like a chameleon on a smarty box – I am a little confused as to why the rand should remain so well supported over the last few trading sessions.

I remain sceptical about the rand’s fortunes, at least until Friday when we receive the agencies’ announcements. For me a surprise move would be if the rating agencies hold off (not my base scenario) and, if they do wait until next year, the rand could be subject to a short-term relief rally, after which we should see a resumption of the weakening trend.

That’s it from me – Friday is D-day.

On another note – I see the military in Zimbabwe didn’t receive the memo about the rules of a coup. It’s all been rather polite and genteel. Instead of guns and bullets, it’s tea and cucumber sandwiches, which is very good news for the Zim public. And - finally - a resignation from Uncle Robert. Interesting times.