• US interest rate hikes
• Looming credit rating reviews where next downgrade level is junk status
• Global emerging market sell offs if China continues to falter
• Slower economic growth and high unemployment than predicted
• Dirty power struggle within the ruling party as Mangaung ANC leadership conference looms
• Increased imports
Strengthening factors:
• Increased demand in commodities and increase in commodity prices
• Sustained positive interest rate differential, yield seeking short term investors
• ECB and / or BoE interest rate cuts
• Falling oil prices
• Increased exports
• Increased risk appetite for emerging market investment
Volatility factors:
• Rand is highly speculative currency withy currency traders / speculators
• Increased uncertainty around the future of the EU
• Trump as the 45th US president who is divisive, anti-establishment and will rock many established agreements
• Dutch parliamentary elections before June
• Article 50 Brexit negotiation trigger March 2017
• France’ s looming elections with a move to a populist right-wing revolution?
• Germany Federal elections late 2017
• EU / Euro currency and liberal democracy being challenged
Ironically, if SA can keep an even keel this year, we might just see the Rand back into the R12 /$ territory but what are the chances? In summary, most of the time South Africa’ s currency starts to tick upwards is often because the counter side is doing relatively worse than us and not that we are doing any better in real terms. Fasten your seatbelts as 2017 will be a very interesting year, remember most of the information one sees on social media and the mainstream media is so hyped, emotional and designed to sell content. Strip aside the noise and look at the fundamentals. Is the world really in such a bad state?
RESOURCES
Sable International
www. reimag. co. za FEBRUARY 2017 SA Real Estate Investor 55