ECONOMIC WEEK AHEAD: Reserve Bank’s June reserves are likely to dip on revaluation effects
A stronger dollar and weaker gold price likely to see SA’s gross reserves decline on revaluation
In a fairly quiet week ahead on the economic data front analysts are likely to prioritise the release of the government’s gross and net reserves figures for June, which are expected to show a decline due to the revaluation effect from a stronger dollar and the consequent decline in the gold price.
The dollar index is trading at a more than three-month high as recent hawkish comments by US Federal Reserve chair Jerome Powell and robust economic data out of the world’s biggest economy prompt analysts to bring forward their expectations of a US rate hike. This is causing the dollar to appreciate, prompting investors to repatriate money from higher-yielding assets such as the rand and putting pressure on the price of precious metals...