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The Rand will be brought into question this week with the release of major domestic data in the form of February’s inflation stats and January’s retail sales. These results could influence the Rand if they bring any surprises.
Retail sales are expected to bounce back after falling to 1.4% in December last year, while we expect a small rise in the inflation rate from the 4% we saw in January. This is due to the volatility in the food and fuel components market, but it isn’t expected to impact the Rand too heavily.
On Wednesday, the US Federal Reserve will be announcing its stance on the monetary policy, but it is not clear what adjustments are expected. It’s been on a stable upward trend since 2017.
On Thursday, Theresa May’s third Brexit deal goes to parliament as she looks for an extension of Article 50 after being handed two heavy defeats already. These events in the US and the UK are major economic influencers, and both can cause volatility in the currency markets.
The local economic activity is also at risk after Eskom announced that power cuts will continue for the rest of the week. This has given rise to fears regarding the Moody’s credit rating review, which is set to take place on 29 March. If Moody’s were to cut the ratings, South Africa would be downgraded to sub-investment grade, which would have catastrophic consequences for the Rand.
Tuesday 19 March
- UK Claimant Count – Low figures set
to boost the Pound slightly.
Wednesday 20 March
- SA inflation and retail sales data
– Positive data will help the struggling Rand.
- US Federal Reserve’s stance on
monetary policy – Expected climb set to stabilise the Dollar.
Thursday 21 March
- Vote on Article 50 extension – The
Pound is in a volatile space with the Brexit deadline on the horizon. An
extension will give the Pound some much-needed stability.
Friday 22 March
- European Council meeting – The two-day meeting is expected to bring nothing but good news for Europe and should boost the value of the Euro.
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