Foreign Exchange - UK Daily Update - Tuesday, October 7, 2008 10:37 - 0 Comments

World First – Rand Update – 7th October – Rand Suffers on the Back of Global Meltdown

Rand Suffers on the Back of Global Meltdown

The Rand was under continued pressure last week and early into trading yesterday, losing over 5% against the dollar to reach 8.90 at one stage. Like most equity markets Monday’s trading was also far from encouraging, with the JSE falling over 7%, as resource and bank stocks were largely marked down. Despite all this it looks as though South Africa has managed to avert most of the damage of the banking crisis, however no economy will be immune to the chaos that has occurred on Wall St recently.

The MPC interest rate decision this Thursday is the major piece of news this week. Inflation still looks to have remained in a threatening position which leaves the policy makers with little room in order to lower rates. There has been a staggering 500bps in rate hikes delivered through the current cycle but this has not had the desired effect on dampening domestic demand.

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