World scrambles to calculate the cost of Trump presidency
Federal Reserve threat alog with short-term pain for smaller currencies
Interest rates may very well rise in the US next month, possibly triggering a wave of reciprocal action from emerging-market central bankers, including South Africa's Reserve Bank, as currencies weaken. This would heighten inflationary temperatures. But with Donald Trump's surprise victory in the US presidential race this week, there are question marks over whether the Federal Reserve's gradual path of interest rate hikes will be sustained in the new year and beyond. Since the Fed set global markets on this course at the start of 2014, emerging-market currencies have been on a weakening path, with the rand depreciating 36% over that time against the US dollar. Any change in US monetary policy could in fact see a reprieve for battered emerging-market currencies. While he is a supporter of a strong dollar in principle, Trump has singled it out as a reason for the US's lack of competitiveness in global trade against countries such as China. During his campaign, he came out in support o...
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.