The South African economy begins its reopening as government grants another bailout for SAA
The rand report is brought to you by Sable International
The South African rand was on the rise for most of last week on the back of some positive risk sentiment and the announcement of the phased reopening on the South African economy effective 1 June. With Coronavirus restrictions being eased across the globe, emerging markets will also be on the rise as investors begin to move away from the safe havens and into the riskier assets. The rand was also helped by the weakness of the dollar as the US economy started to take a beating along with the rise in geopolitical tensions with China.
In a week that’s light on domestic data reports, the South African Rand will be taking cues from anti-Dollar movements (all eyes on the US jobs data on Friday) and global risk sentiment. Traders should keep an eye out for a sharp rise in COVID-19 cases as the economy begins its phased reopening.
Late on Monday, the South African government provisionally agreed to a R21 billion bailout for the already capsized South African Airways (SAA), with R17 billion of that going towards repaying SAA’s creditors.
Going forward, the Rand will strengthen in line with a return to risk appetite and any consolidated progress with the reopening of the economy.
Market event calendar
Tuesday 02 June
- Reserve Bank of Australia rate decision: Expected to remain at 0.25%
Wednesday 03 June
- Australia GDP growth grate (Q1): Expected to fall to -0.5%
- Bank of Canada rate decision: Expected to hold steady at 0.25%
Thursday 04 June
- US balance of trade (April): Forecast US $-54.3 billion, previous US $-44.4 billion
Friday 05 June
- UK consumer confidence: Expected -34, previous -33
- US non-farm payrolls (May): 8.87 million
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