Attention has now shifted to South Africa and ZAR – Danske Bank

South Africa and the Rand could now come under some pressure, according to Senior Analyst at Danske Bank Jens Pedersen.

Key Quotes

“In emerging markets, the ZARis under pressure this morning after US president Trump tweeted last night that he has asked his Secretary of State, Mike Pompeo, to look into the South African government’s land reform, accusing the government of ‘seizing land from white farmers’.

“The tweet has induced fear in the market of South Africa being hit by similar sanctions as witnessed by Turkey. The pressure on South Africa comes at a time when the economy is slowing down and is struggling with relatively large external imbalances (although not of the sort that Turkey is dealing with)”.

“Hence, the ZAR could continue to be under pressure in coming days until there is more clarity on relations between the US and South Africa”.