- Analytics
- News and Tools
- Market News
- USD/ZAR: Rand should do well given South Africa's large weighting in EM bond and equity benchmarks – ING
USD/ZAR: Rand should do well given South Africa's large weighting in EM bond and equity benchmarks – ING
The South African Rand is holding up despite the lack of a rate hike. Economists at ING analyze ZAR's outlook.
Market thinks that the SARB has concluded its tightening cycle
The vote was close – three to two in favour of unchanged rates – but now the market thinks that the SARB has concluded its tightening cycle and will be easing policy in the first half of next year.
The fact that the Rand did not sell off more shows that investors feel calmer about inflation prospects and increasingly like high-yield EMFX ahead of a possible cyclical Dollar decline later this year. The Rand of course has its challenges such as weak growth, a widening current account deficit, and the geopolitical headwinds of its relationship with Russia. However, if we are right that portfolio flows to EM rebound later this year, the ZAR should do well given South Africa's large weighting in EM bond and equity benchmarks.
As for most other high-yield EM currencies, we think the Rand can outperform the steep USD/ZAR FX forwards curve.
© 2000-2024. All rights reserved.
This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.
Bank transfers
