Market news

2 November 2021

USD/ZAR: Rand weakness amid challenging conditions for emerging markets – MUFG

October has been a volatile month for the rand. USD/ZAR fell in the first half of October hitting an intra-day low of 14.354 before quickly reversing the move lower in the final weeks of the month. As economists at MUFG bank note, a less favourable external backdrop is dampening capital flows into emerging markets, which should hurt the ZAR.

Increasing speculation that the SARB will start raising rates on 18th November

“South Africa has been running an unusual current account surplus since the pandemic began which is helping to ease their reliance on external financing and make the rand less sensitive to fluctuations in global investor risk sentiment. Still the rand has been undermined by the Fed’s more hawkish plans for a faster tightening of monetary policy.”

“We expect the Fed to begin tapering QE from mid-November, and the tapering process is likely to be brought to an end by around the middle of next year. It leaves open the door for the first rate hike in 2H 2022.” 

“Global inflation concerns and the weaker rand are increasing speculation that the SARB will start raising rates as soon as their next meeting on 18th November. However, we do not expect modest rate hikes to offer much support for the rand.”

“We expect further rand weakness in the year ahead as market conditions will be challenging for EM FX.”

 

Market Focus

Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimer.

Open Demo Account
I understand and accept the Privacy Policy and agree that my name and contact details can be used by TeleTrade to contact me about the information I have selected.
23 International Awards
Have a question?

We are ready to assist you in every step of your trading experience
by providing 24/5 multilingual customer support.

Follow us

Risk Warning: Trading Forex and CFDs on margin carries a high level of risk and may not be suitable for all investors. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Prior to trading, you should take into consideration your level of experience and financial situation. TeleTrade strives to provide you with all the necessary information and protective measures, but, if the risks seem still unclear to you, please seek independent advice.

© 2011-2022 Teletrade-DJ International Consulting Ltd

Teletrade-DJ International Consulting Ltd is registered as a Cyprus Investment Firm (CIF) under registration number HE272810 and is licensed by the Cyprus Securities and Exchange Commission (CySEC) under license number 158/11.

The company operates in accordance with the Markets in Financial Instruments Directive (MiFID).

The content on this website is for information purposes only. All the services and information provided have been obtained from sources deemed to be reliable. Teletrade-DJ International Consulting Ltd ("TeleTrade") and/or any third-party information providers provide the services and information without warranty of any kind. By using this information and services you agree that under no circumstances shall TeleTrade have any liability to any person or entity for any loss or damage in whole or part caused by reliance on such information and services.

TeleTrade cooperates exclusively with regulated financial institutions for the safekeeping of clients' funds. Please see the entire list of banks and payment service providers entrusted with the handling of clients' funds.

Please read our full Terms of Use.

To maximise our visitors' browsing experience, TeleTrade uses cookies in our web services. By continuing to browse this site you agree to our use of cookies.

Teletrade-DJ International Consulting Ltd currently provides its services on a cross-border basis, within EEA states (except Belgium) under the MiFID passporting regime, and in selected 3rd countries. TeleTrade does not provide its services to residents or nationals of the USA.

Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimer.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Choose your language/location