There were many reasons for the Rand’s wild movement last week. Most of the moves were due to a lack of liquidity in the markets, but a contributing factor was also the political fallout from the Constitutional Court’s judgement against President Jacob Zuma.
The Rand saw a comeback after the court’s finding that President Zuma had failed to uphold the Constitution and that parliament had disregarded its duties in their dealing with the Nkandla report. This was seen as extremely positive, as it showed the judiciary to maintain its independence in the face of corruption.
This week started off on a high note, with the USD-ZAR under 15.00, however markets still appear volatile.
What to look out for this week: On the local and international data front, both the British and the European Consumer Price Indexes will be released. This may affect South African markets if there is an increase in inflation, as this will affect import prices.
In South Africa, mining and retail data will be released. Most analysts are not expecting either of these sets of data to show improvement.
source: The South African