The rand has taken a bullet. Pulling the trigger, Investment bank JPMorgan late yesterday recommended selling the local unit to cash in on a recent “hot streak” which has made it one of the world’s best performing currencies this year. Piling on the injury which took the currency to a three-week low against the US dollar, was the release of slightly lower-than-expected US inflation data, reducing pressure on the Federal Reserve to start pulling back on stimulus.
Poor Chinese retails sales and industrial production data released earlier this morning also put some pressure on emerging market currencies.
The pullback comes just as the currency reclaimed its top spot last week among emerging market peers after being rattled by last month’s taper talk.
But the correction was bound to happen. TreasuryONE’s currency risk strategist Andre Cilliers told Biznews in its weekly Currency Focus podcast yesterday that the currency tends to always stretch the elastic band a little bit too far.
Like he aptly comments: “When have we ever seen the rand behave properly? It’s either too weak or too strong; it always pulls a little bit too far on that elastic band and then makes a bit of a correction. So, yes, I think it’s a little bit too strong. It’s gone a little bit too far and people are a little bit ahead of themselves. So, I think rather on the upside, back to the R14.60, R14.70 levels.”
The local currency was last trading at R14.36 against the US dollar.
In other uplifting news, South Africa’s top youth jobs guru Maryana Iskander has landed the CEO position at Wikipedia group.
Here’s a roundup of the world’s top and most interesting headlines:
SA Business
Digital Vibes: SIU flags ‘corrupt’ payment into Department of Health staffer’s bank account – Daily Maverick
Billionaire Patrice Motsepe’s African Rainbow eyes fintech investments – Bloomberg
SA gets its first dedicated SMEG store. Where you can buy a R1.3m fridge. – Business Insider
Global Business
Global debt is fast approaching record $300 trillion – IIF – Reuters
Get ready to drop some serious cash on a fully loaded iPhone 13 – Mashable
‘Ghost kitchens’ boom in Asia as pandemic sparks huge demand – AFP
Markets
China tech falls as Macau casino curbs stoke fear of more limits – Bloomberg
US close: Stocks close lower following CPI report, Apple product launch – Sharecast
Plunging platinums pull JSE down – SAccess
Opinion/In-depth
The shadowy world of Big Tobacco: Africa comes cheap at the price – Daily Maverick
Marriages of inconvenience: the fraught politics of coalitions in South Africa – The Conversation
South Africa must object: Public Protector is wasting state funds with hopeless legal appeals – Daily Maverick
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