IT SEEMS as if there’s an eerie silence in the currency market. The silence is the sound of the rand NOT crashing. Because, if past trends were anything to go by, the rand should have tracked the euro and been much weaker by now.
The current fiscal crisis in Europe raises the question whether the contagion will spread to SA. Why is the rand not tracking the euro, which has weakened sharply because of Europe’s financial problems? Is there a chance that the fiscal crisis in Europe will spread to the US and Britain as well, leading to a second wave of global recession? Will there be global risk aversion?