Local investors and citizens breathed a sigh of relief at Moody’s decision to delay South Africa’s credit rating assessment. The delay gave the Rand a welcome boost at the beginning of last week.
However, reports that the government is once again considering plans to provide further financial support to Eskom is likely to place the Rand under pressure once more. Economists have predicted that the financial bailout for Eskom could be the tipping point that will see Moody’s downgrade South Africa to junk status.
International news is going to be the key driver for the Rand this week as there isn’t much in terms of domestic data publications. The Rand is likely to be dented slightly by weak mining and manufacturing output data for February, which is to be released on Thursday.
The Brexit deadline was extended once more to 12 April. Theresa May and EU leaders will be meeting at a special summit on Wednesday to discuss Brexit. The meeting takes place just two days before the extended deadline.
Emerging markets will remain optimistic over US-China trade talks after US president Donald Trump indicated that a deal with China might be revealed in the next four weeks.
Event market calendar
Tuesday 9 April
- EU-China summit: The 21st EU-China summit is focused on achieving a balanced relation, which ensures fair competition and equal market access for both China and Europe.
Wednesday 10 April
- UK Balance of Trade and GDP: It is expected that the Balance of Trade will be halved from £-3.8B to £-1.2B. The GDP results are expected to drop by half a percent to 0.0%.
- European Council Meeting: Theresa May will be meeting with EU leaders to discuss Brexit.
Thursday 11 April
- South Africa Mining and Manufacturing Data: Both are expected to dip from January and will cause the Rand to lower in value in the short-term.
Friday 12 April
- Brexit deadline: Once more the Brexit deadline will try to find a way for the UK to make a clean exit from Europe.
- China Balance of Trade, Exports and Imports: Positive data will impact the Rand, including other emerging markets.
-Dean Reich
