Rand flat as negative sentiment takes hold
Oanda analyst Craig Erlam says it is likely to be ‘another turbulent week as investors try and navigate incoming news and data and determine how bad the sell-off will be’
The rand was little changed against major global currencies on Monday morning, ahead of what may be a volatile week for the local currency. Political risk in Europe and the Middle East, and looming midterm elections in the US all lie ahead for local investors, with the rand recently under strain after the medium-term budget policy statement (MTBPS). Rising deficits locally may be sufficient for ratings agency Moody’s to downgrade SA’s credit outlook from stable to negative, said Nedbank Corporate and Investment Banking strategists Mehul Daya and Walter de Wet. Although SA should retain its investment grade ranking, this should ensure that any rallies in the rand are short-lived. Global focus on Monday was on further political difficulties in Germany for Chancellor Angela Merkel, whose party suffered a decline in regional elections at the weekend. “We’re likely in for another turbulent week in financial markets as investors continue to try and navigate incoming news and data and dete...
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