Lagos — Wall Street bears are stalking the rand. As South African political risks mount and commodity prices retreat, banks from JPMorgan Chase to Morgan Stanley and Bank of America are telling clients to short the rand against other major emerging-market currencies, including Turkey’s lira and Mexico’s peso. They’re predicting the sell-off that began in late March, when President Jacob Zuma sacked then finance minister Pravin Gordhan, is about to repeat itself. Only this time the trigger may come if Zuma survives a possible parliamentary vote of no confidence and his former wife, Nkosazana Dlamini-Zuma, is named head of the ANC in December. "It’ll be difficult for the rand to regain the bullish momentum that dominated throughout the second half of 2016 and earlier this year," said Piotr Matys, a currency strategist at Rabobank in London, who sees the currency weakening beyond R14 to the dollar in the next few months. "The rally is more than likely over." While the currency added 0....
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.