Recent Rand
strength may not prove durable
28 May
2014
The placid
Global atmosphere has been equally beneficial for equities, with the most global
industries at record or multiyear highs. At home this groundswell of positive
sentiment has pushed the JSE to touch fresh highs and seen good flows into SA,
once again providing support to the rand.
At the same time
several factors paint a fairly rosy picture of our currency outlook in the short
term, the economy still exhibits pronounced macro
vulnerabilities.
Growth remains
weak and nowhere near the job creating requirements outlined in the NDP, large
twin deficits glower in the background, and inflation is accelerating. The
platinum strike has done nothing for our already anaemic trade data, and weaker
figures suggest that our current account is likely to deteriorate.
Andre
Delport
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