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As of now the ZAR has gained over 2% for the day and we have had 6 consecutive days of gains. Now who in their right minds will short the ZAR after a 9 month bull run.
Some traders do but only after an anomalous short term sharp strengthening and getting in on the rebound making it volatile.

Had it not been for our number one doing a No. 1 on the ZAR in his Nkandla toilet we would have a much stronger ZAR.

Interest rates in developed countries are next to nil and even negative so what do the fund managers do? Invest in EM's that have a superior interest rate at 6 to 8%. A no brainer for them. This will strengthen the ZAR.

To top it all, InBev has almost more money than the SA reserve bank has and now has to buy ZAR to pay the investors in ZAR.
This will take weeks of buying so expect more upside for the ZAR.





 

The rand may be cheap versus its theoretical “purchasing power parity” (PPP) level but not by much. According to the PPP model the rand is only 6% cheaper than its fair value of R/$12.80. Following the “Nenegate” debacle last December the rand was 25% undervalued. Admittedly the rand has at times overshot its fair value. For instance, in mid-2010 (during the FIFA World Cup) the rand was 15% above fair value. However, given the threat of a sovereign credit rating downgrade to sub-investment grade, and an economy teetering on the edge of recession it seems unlikely that the rand should be anywhere close to its PPP fair value.
Despite the steady underperformance of “rand hedge” shares since the start of the year, coinciding with the rand’s appreciation, we would recommend exercising patience. The rand hedge stocks listed on the JSE typically exhibit sound prospects in their own right, not only appealing for their rand hedge credentials alone. With the JSE ALSI 40 index now deriving over 70% of its earnings from offshore, an absence of rand hedge shares in an investment portfolio would put it at considerable risk of underperforming the market benchmark.
Given the extent to which the rand has closed-in on its theoretical fair value in spite of the near-recessionary economy, looming credit rating downgrade and rising political uncertainty, the current rand strength offers an excellent opportunity to diversify into offshore markets.

Source: Overberg Asset Managers.
Orca, take note PPP 

I would wait for the uncertainty to pass first.
PROS:
1.The cheap £ will attract more tourists next summer. This will be good for the £.
That's it.
CONS:
1.UK needs 80 000 seasonal fruit and vegie pickers from eastern Europe from July to December. The locals will not do it.
Last summer the agencies could not fill the quota and it is expected that due to the exchange rate, the pickers will stay in Europe mainland countries like Germany and Scandinavia this coming summer.
Farmers will be forced to watch their produce rot and businesses will have to import foods and even beer, wine,vinegar etc.
This will cause prices to rocket and bad for the £.

2. London is the financial hub of Europe and banks will move their HQ's to the continent. One bank has already vacated taking 2 000 employees with them. Bad for the £.

So it is a gamble in my view.

Thanks guys you make some good points and think I'll wait a while to see what Sterling does

I would wait for the uncertainty to pass first.
PROS:
1.The cheap £ will attract more tourists next summer. This will be good for the £.
That's it.
CONS:
1.UK needs 80 000 seasonal fruit and vegie pickers from eastern Europe from July to December. The locals will not do it.
Last summer the agencies could not fill the quota and it is expected that due to the exchange rate, the pickers will stay in Europe mainland countries like Germany and Scandinavia this coming summer.
Farmers will be forced to watch their produce rot and businesses will have to import foods and even beer, wine,vinegar etc.
This will cause prices to rocket and bad for the £.

2. London is the financial hub of Europe and banks will move their HQ's to the continent. One bank has already vacated taking 2 000 employees with them. Bad for the £.

So it is a gamble in my view.

Orca, all over Sky news now about the banks pulling out

Would you think Sterling will drop further against the Dollar? I read one forecast of $1.09! Not so long ago it was double that! 

@P. There is no reason for the zar to reverse its bull trend unless shower head fires Pravin after his speech. I doubt he will do that as it will surely look like fiscal capture. All major resistance levels have been breached so we may see sub 12 soon.
Modify message

i WaNT sub R14.00     

Quote from: jaDEB on February 16, 2017, 03:48:54 pm

i WaNT sub R14.00     

I am confused

Ja nee...