Election results could boost the rand if US-China trade war does not escalate
Some analysts believe the rand may strengthen to R13.50/$ if Cyril Ramaphosa can enact his economic-growth reforms
With the elections out of the way, currency traders will be watching events offshore for signs of whether Cyril Ramaphosa’s inspired strength that pushed the rand to an almost three-week high will persist. Markets will focus on the US-China trade spat, whose escalation helped push local stocks lower last week, in line with losses in Asia, the US and Europe. The JSE all share index slipped 4.31% last week, its biggest weekly drop since February 2018. The US decision to impose tariffs of up to 25% on some Chinese goods spooked investors, hurting emerging markets on speculation that a drop in world trade will effect their economies the most. The rand largely ignored that and gained 1.3% last week as election results confirmed that the ANC was heading for a victory in line with what markets had been hoping for. While the ANC’s victory, with 57.5% of the vote, was lower than in 2014, it was seen as substantial enough to strengthen Ramaphosa’s hand as he seeks to root out corruption in th...
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