Talking technicals
GARTH MACKENZIE: Tracking the turmoil
Zuma’s midnight ministerial move has hit the currency and government bond markets
The rand has come under considerable pressure and bond yields have spiked following recent political developments in SA. It began with finance minister Pravin Gordhan being recalled from an investor road show to the UK on March 27. That morning the rand had hit its strongest level in 20 months. From then, things developed quickly, with news headlines flipping from one piece of bad news to the next. A midnight cabinet reshuffle by President Jacob Zuma resulted in Gordhan and his deputy, Mcebisi Jonas, being replaced by Malusi Gigaba and Sfiso Buthelezi. Neither of them was welcomed by the markets.
The long-term weekly chart of the rand/dollar exchange that looks back to the beginning of the millennium shows that the rand blew out to R12.50/$ at the end of 2001 before staging a significant recovery in the years that followed. It would take another 14 years to revisit the R12.50 level. In 2015 the currency weakened sharply through the R12.50 level, blowing out again at the end of...
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