Developed Market Currencies

Wealth

Developed Market Currencies

The rand subsequently lost 3.15% to the USD, 3.86% to the pound and 2.79% to the euro.

The rand traded weaker against most developed market currencies in response to developments in Argentina, as well as renewed fears surrounding our local land debate. The Argentine government has requested the IMF to speed up the release of $50 billion in bailout funds, as the peso resumed its fall over the past week. Argentina’s central bank raised short-term interest rates to a massive 60 percent from 45 percent and vowed not to lower them until December at the earliest in an effort to stem the rout and to protect the country’s dwindling currency reserves. The weak peso is helping to fuel inflation, which is now running in excess of 30%. This fuelled a further selloff in emerging markets against which South Africa was not immune. The rand subsequently lost 3.15% to the USD, 3.86% to the pound and 2.79% to the euro.

Equity markets performed mixed and the local market closed marginally softer. The JSE all-share index (ALSI) closed 0.16% down, with the industrial index closing 3.02% lower fuelled by major losses in MTN and Naspers for company specific reasons. The resources and financial sectors closed 3.96% and 1.55% stronger respectively.

US equity markets performed well. The S&P 500, Nasdaq 100 and Russell 2000 indices all hit new record highs, bolstered by easing trade tensions, strong US economic and earnings growth, and signs of optimism regarding a Brexit agreement.

European markets closed mixed. The FTSE in London lost 1.91%, the CAC 40 closed 0.47% softer, and the DAX in Germany closed almost unchanged at -0.03%.

Brent crude oil closed at $77.6 per barrel, 2.58% higher than a week before. This means higher fuel prices, which are expected to increase by between 25 and 27 cents a litre, with both 0.05% and 0.005% sulphur diesel rising by around 31 cents and illuminating paraffin by 19 cents.

Although little can be done about international events affecting the SA currency, government should provide policy clarity on local issues that influence the economy. This would attract investors, support the currency and promote much-needed economic growth.

 

Kind regards,

 

SECURITAS – Wealth Management
























Securitas Financial Group is a Registered Financial Services Provider (FSP) FSB license number 6536

Johan Steyn, RFP®, Cell. 082 680 9510, johan@securitas.co.za; 

Albert van der Linde, B.Com (US), B.Com (Hons)(UP), Cell. 076 087 3084, albert@securitas.co.za;
Hannes Bresler, CFP®, B.Com (Hons)(UJ), Pr.Tech Eng, Cell. 082 823 7973, hannes@securitas.co.za;

Market data provided by I-Net | News article provided by Securitas with 4D Wealth