ONLINE FOREX BROKER
2020-09-10 • Updated
Commerzbank announced its short- and long- term projections on the South African rand. Let’s discuss it in detail.
Analysts from Commerzbank anticipate the rand will stay at current high levels up to the end of this year and then soar at the beginning of 2021. However, the bank warned that that forecasts will come true, only if the two following conditions are met. First of all, the US dollar should follow its long-term downtrend further. Secondly, the stock market has to keep rallying upwards as the South African rand and equity markets are positively correlated. Indeed, the overall market sentiment has a huge impact on the rand. Since the coronavirus is being taken under control and the global economy is gradually recovering, there are all chances for the emerging market currencies to rise. Elsewhere, most world’s largest economies established low rates for longer, which will force investors to flow their capital to countries with higher yields such as Southern Africa.
However, concerns over the heavy debt levels in South Africa may push the rand down in the medium term. The country’s rate was downgraded to the “junk” level even before the coronavirus pandemic. Lockdowns, restrictions, and the overall economic downturn have made the debt crisis more likely to happen in South Africa. Anyway, investors can shrug off the risk of the debt crisis for now. The more urgent problem is US-China escalating tensions, which weigh on the overall sentiment and the stocks’ performance, which are closely linked with the riskier currencies like the rand. Moreover, the South African crumbling infrastructure such as electrical problems, doesn’t allow the country to recover fast. It will take a lot more time to rebound after the virus slump, which may have a negative effect on the rand as well.
Commerzbank anticipates the rand will fall a little bit, pushing USD/ZAR to climb from 16.66 on Thursday to 16.70, which is an upgrade from the initial Commerzbank’s forecast for USD/ZAR of 17.0. As for the long term, the rand is going to surge higher by the middle of 2021 after driving USD/ZAR down to 16.30.
USD/ZAR is stuck in a range between 16.60 and 17.00. The move above the top of its range will drive the price to the high of August 17 at 17.50. In the opposite scenario, if it drops below 16.60, the way towards the support of 16.40 will be clear.
Oil prices rebounded slightly on Friday but are still expected to show losses for the week due to concerns about slowing growth in the US and China. US crude futures rose 2.7% to $70.41 per barrel, while the Brent contract increased by 2.5% to $74.33 per barrel.
China's economy is rocketing. On the other hand OPEC+ countries take the decision to cut the production. What will be the impact on the oil price?
The EU plans to intervene in markets directly to curb rising energy costs, threatening to push the Euro area's economy into a deep recession.
Let's dive into the latest developments shaping the global economic landscape. Good news first: the threat of an unprecedented US debt crisis has receded, as US lawmakers passed a bill to raise the debt ceiling and avoid a catastrophic default. Phew! But don't pop the champagne just yet, because storm clouds are still looming. High inflation, rising interest rates, and sluggish growth are challenges that have yet to disappear.
Thanks to the incredible advancements in horizontal drilling and fracking technology, the United States has experienced a mind-blowing shale revolution. They've become the heavyweight champion of crude oil production, leaving Saudi Arabia and Russia in the dust. They even turned the tables and became net exporters of refined petroleum products in 2011.
Let's dive into the world of gold. Currently, the price of gold, represented by XAUUSD, is stuck in indecision, hovering around the $1,975 mark. The market is anxiously awaiting two important factors: the release of the Federal Reserve's meeting minutes and the extension of the US debt ceiling.
FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.
Your request is accepted.
A manager will call you shortly.
Next callback request for this phone number
will be available in
If you have an urgent issue please contact us via
Live chat
Internal error. Please try again later
Don’t waste your time – keep track of how NFP affects the US dollar and profit!
Beginner Forex book will guide you through the world of trading.
We've emailed a special link to your e-mail.
Click the link to confirm your address and get Beginner Forex book for free.
|
