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Daily Dose

20 September 2017

Happy Friday,           


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On The Wires,

Death Toll From Hurricane Maria Rises … Grenade Attack Kills 3, Wounds 23 In Indian-Held Kashmir … All Eyes On May As She Spells Out Key Brexit Demands … Puerto Rico's Recovery From Maria Complicated By Money Issues … Work On China's Mission To Mars 'Well Underway' … Sisulu Concerned About Zuma’s Frequent Cabinet Reshuffles … Parents Urged To Play Their Part In Disciplining Children … SARB Still Expected To Cut Repo Rate Later This Year … 2 Passengers Due In Court Over OR Tambo Bomb Threats … MTN Technical Issues Leaves Some Users Disconnected … Kuldeep Yadav Hat-Trick Sets Up India’s Win Against Australia … Koeman Hopes League Cup Win Over Sunderland Has Ended Everton Slump … Klopp Looks For Boost After Troubled Spell … Sharks Draw Their Big Guns For Blue Bulls Showdown … Banyana Banyana Advances To Cosafa Final …

Two Cents Worth

 

Currency Crackdown

The rand reversed losses against the dollar yesterday after the SARB’s surprising decision to keep interest rates unchanged at 6.75%. The market expected a 25 basis points cut in the repo rate, with 17 out of 21 economists polled in agreement. The SARB could still cut rates this year (possibly in November), with the monetary policy committee (MPC) being split on the decision - three members in favour of a cut and three wishing to keep rates unchanged.

Reserve Bank Governor Lesetja Kganyago cited the prospect of a further ratings downgrade, particularly given the increased fiscal challenges and political uncertainty as well as rand’s recent weakness as a reason to keep rates unchanged. He also said that although inflation is comfortably between 3% and 6%, there are concerns that the volatile rand and high oil price could impact on this in the near-term. However the narrower current-account deficit and the global environment remain supportive of the rand.

Offshore, the dollar is under renewed pressure on the back of rising tensions between the US and North Korea. North Korea's leader Kim Jong Un said that he will consider the "highest level of hard-line countermeasure in history" against the United States in response to US President Donald Trump's threat to destroy the North. Calling Trump "mentally deranged" and his comments "the most ferocious declaration of a war in history," Kim said his UN speech on Tuesday confirmed Pyongyang's nuclear programme has been "the correct path". We have seen some safe-haven buying this morning following the comments, with gold up $3.

It should be a quiet Friday heading into the long weekend, we had French GDP figures come out unchanged this morning and we just have Eurozone manufacturing PMI (10:00) and US manufacturing PMI (15:45) later today.

Did You Know

In the UK, September 26 is the most common birthday for people born in the last 20 years.

 

Have a great long weekend,

Nyiko

 

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