Rand fore­casts haven’t been this scat­tered since at least 2006

CityPress - - Business -

Don­ald Trump’s US elec­tion vic­tory has caught the world’s most volatile cur­rency in a tug-of-war, with fore­casts for the end of next year rang­ing from a 9% gain to a 14% re­treat against the dol­lar, es­ti­mates com­piled by Bloomberg show. That’s the widest dis­tri­bu­tion since at least 2006, when Bloomberg started track­ing the data.

Work­ing against the rand are con­cerns a Trump pres­i­dency will force the Fed­eral Re­serve to quicken the pace of in­ter­est rate in­creases, erod­ing the ex­tra re­turns from riskier emerg­ing mar­ket as­sets. At the same time, Trump’s plan to spend as much as $1 tril­lion (R14 tril­lion) on in­fra­struc­ture has boosted com­modi­ties, which are South Africa’s main ex­port earner, and prompted Gold­man Sachs to rec­om­mend in­vestors bet on higher prices next year.

The most bullish fore­cast for the rand, which en­vis­ages the cur­rency at R13 to the dol­lar at the end of next year, has a 60% prob­a­bil­ity, ac­cord­ing to op­tions data com­piled by Bloomberg. The most bear­ish pre­dic­tion from the more than 15 an­a­lysts polled is for a level of R16.50.

– Bloomberg

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