The conundrum of what is going on in the US economy continues to grow as economic expectations miss market expectations. The misses are not geared towards any side as they have been grossly under a
We have said before that the “terms of trade” has helped the rand stay at suppressed levels in the short term. By terms of trade, we mean that the market is heavily skewed toward dollar
After drifting sideways for the better part of 2 weeks, the market finally moved out of its established ranges as the rand surprised many in the market and broke below the R14.20 level last week. <
The rand resilience is surprising as a stronger dollar usually leads to a weaker rand. In the past few weeks, it has completely ignored the US dollar
As we head into Year 2 of the pandemic, we can say, without any shadow of a doubt, that the COVID- pandemic has affected everybody.
The tumultuous economy that is Turkey had its biggest currency devaluation day in 20 years as President Erdogan sacked his Central Bank Chief.
So, US CPI and what happens to it in the future will be a crucial focus.
The flight to US Treasury Yields had a knock-on effect, and we have seen riskier assets like EM currencies feeling some of the pain.
The Rand is used a lot as a proxy hedge for other emerging markets, and thus we tend to see the Rand overreact sometimes.
One of the areas of concern is how big the expected budget deficit will be in light of the COVID pandemic and how the deficit will be funded in the future.