Rand report: Volatility and instability

South Africa was moved to adjusted level 3 lockdown on Monday 28 December 2020. The harder restrictions haven’t been good for the rainbow nation and investors have been pulling funds out of the economy, as a result. The rand has weakened by about 6% against the pound and roughly 5.5% against the greenback since the new restrictions were enforced.

b4b5d125 rand report graph 20 12 01 - Rand report: Volatility and instability
Image credit: Sable

In global news, pro-Trump supporters breached the capitol building last Wednesday in hopes of foiling Joe Biden’s victory. The unprecedented scenes caused global uncertainty and left investors flocking towards cryptocurrencies, leaving emerging markets.

Ramaphosa addressed the nation last night with regards to the Coronavirus pandemic, which is the worst it has been since the first case was reported. Level 3 lockdown restrictions will be extended, but to the relief of many citizens, the new curfew hours will begin at 9 pm and end at 5 am.

In terms of local data for the week, we can expect retail sales for November to be released on Wednesday. We also anticipate the rand to be influenced by global sentiment as well as the tug of war between vaccine optimism and the effects of lockdown restrictions.

Market event calendar

Wednesday 13 January 

  • Eurozone: Industrial Production (YoY) Nov – Expected at -3.2%
  • SA: Retail Sales (YoY) Nov – Expected at 0.7% 
  • USA: Inflation Rate (YoY) Dec – Expected at 1.2%

Thursday 14 January 

  • China: Balance of Trade Dec – Expected at USD 65 Billion
  • GER: Government Budget 2021 – Expected at -7%

Friday 15 January 

  • UK: Balance of Trade Nov – Expected at GBP -1.2 Billion
  • USA: Retail Sales (MoM) Dec – Expected at -0.2%

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