TreasuryONE’s currency danger strategist Andre Cilliers hasactually been included in the foreign exchange markets for nearly 4 years. He might mostlikely count on one hand the number of times he hasactually been positive about South Africa’s ever-weakening currency. But a confluence of aspects is supplying a effective stimulant, with Cilliers havingactually changed (at least momentarily) into a rand bull. He reckons a evenmore rise to R14.50 versus the UnitedStates dollar might be on the cards.
Andre Cilliers on the technical analysis of the rand
The focus is not actually on attempting to forecast the currency, however to shot and handle the danger that comes along with being in markets, either importing or exporting, and to alleviate some of those threats. There are numerous items you can utilize. We have encouraged our exporters that if you see it around the 15.30 and 15.40 levels – referring to the rand dollar exchange rate – we advise our exporters appearance at covering some of the threats, specifically for the brief term, since those rates may not be there for a really long duration. You will recall we’ve spoken about a currency that traded in a 15.20 to 15.50 band and I’ve stated numerous times that if it breaks out of the 15.20 to the bottom end, we might test the 50 levels versus the rand, which is precisely what tookplace. We are now at these levels where we’re presently trading around 14.85. In inbetween, we had the war and a currency that acted extremely oddly because most individuals anticipated the rand to take a bit of a whipping and compromise significantly at the start of that war. We are presently listedbelow the 15.00 level, so it’s really notlikely it will break out of a variety of the 14.85 to 15.20 levels at this phase. It appears to be strongly established at those levels. We are getting closer to technical levels onceagain, where if it breaks lower, we might even go down as low as 14.50.
On elements affecting the rand’s outperformance
We haveactually seen a gold rate reaching levels of 2,070. We’ve had palladium up at 3,600, and platinum around 2,300. It has because come down rather a bit, however at those levels, South Africa being a product nation, absolutely got a bit of a right tick in that block. Secondly, if you appearance at Russia and the South African trade figures with Russia, specific markets in the nation – the fruit market, for circumstances – may be somewhat more exposed. But if you appearance at the general trade of South Africa with Russia, then our trade with Russia and Ukraine are fairly little and they are not our mostsignificant trading equivalents. In other words, in terms of sanctions and a circulation of items inbetween the nations, we might get a little best tick in that block. Geographically, we sit at the southern pointer of Africa, which is a bit far gottenridof from what takesplace in Europe, is onceagain a right tick. With all those little best ticks in terms of trade and imports and exports, that is why the rand carriedout muchbetter. Our yields are likewise still reasonably high compared to other emerging market nations. So, for a modification, you can state that we are a minor safe sanctuary at the southern suggestion of Africa, forthisreason the rand carriedout incredibly well throughout this duration.
On the rand going forward
It is challenging to translate what [will happen going] forward. We are seeing the oil cost carryingout terribly onceagain; bad for customers, great for oil and oil drillers. I believe the factor is Europe stating they may location an embargo on the oil. There might be a evenmore scarcity of oil since noone else can import oil out of Russia. Going forward, we have to see how close we get to talks inbetween Ukraine and Russia duetothefactthat that will effect how things [pan] out. But for the minute, I do not anticipate the rand will unexpectedly compromise and go above the 15.10, 15.20 levels. We will stay within these varies and we have to watch the 14.80 level rather carefully. If that breaks listedbelow 14.80, we might go into a variety of 14.50 to 14.90 for rather some time. At the minute, the threat for me is to a morepowerful rand and not truly a weaker rand.
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