Don’t waste your time – keep track of how NFP affects the US dollar!

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.

Join the Facebook community of FBS!

Beginner Forex book

Beginner Forex book will guide you through the world of trading.

Email tooltip

Thank you!

We've emailed a special link to your e-mail.
Click the link to confirm your address and get Beginner Forex book for free.

FBS Mobile Personal Area

FREE

View
Commerzbank’s forecasts on rand

Commerzbank’s forecasts on rand

Information is not investment advice

Commerzbank announced its short- and long- term projections on the South African rand. Let’s discuss it in detail.

Why may rand rise?

Analysts from Commerzbank anticipate the rand will stay at current high levels up to the end of this year and then soar at the beginning of 2021. However, the bank warned that that forecasts will come true, only if the two following conditions are met. First of all, the US dollar should follow its long-term downtrend further. Secondly, the stock market has to keep rallying upwards as the South African rand and equity markets are positively correlated. Indeed, the overall market sentiment has a huge impact on the rand. Since the coronavirus is being taken under control and the global economy is gradually recovering, there are all chances for the emerging market currencies to rise. Elsewhere, most world’s largest economies established low rates for longer, which will force investors to flow their capital to countries with higher yields such as Southern Africa. 

Why may rand fall?

However, concerns over the heavy debt levels in South Africa may push the rand down in the medium term. The country’s rate was downgraded to the “junk” level even before the coronavirus pandemic. Lockdowns, restrictions, and the overall economic downturn have made the debt crisis more likely to happen in South Africa. Anyway, investors can shrug off the risk of the debt crisis for now. The more urgent problem is US-China escalating tensions, which weigh on the overall sentiment and the stocks’ performance, which are closely linked with the riskier currencies like the rand. Moreover, the South African crumbling infrastructure such as electrical problems, doesn’t allow the country to recover fast. It will take a lot more time to rebound after the virus slump, which may have a negative effect on the rand as well.

Forecasts in numbers

Commerzbank anticipates the rand will fall a little bit, pushing USD/ZAR to climb from 16.66 on Thursday to 16.70, which is an upgrade from the initial Commerzbank’s forecast for USD/ZAR of 17.0.  As for the long term, the rand is going to surge higher by the middle of 2021 after driving USD/ZAR down to 16.30.

Technical tips

USD/ZAR is stuck in a range between 16.60 and 17.00. The move above the top of its range will drive the price to the high of August 17 at 17.50. In the opposite scenario, if it drops below 16.60, the way towards the support of 16.40 will be clear.

USDZARDaily.png

   LOG IN

Similar

How to Stay Calm and Trade on Uncertainties

Despite the negative news and worrying headlines, we recommend traders to make mental reframing of the situation. This way, you can look at the market from a different perspective. Let’s observe how you can take advantage of the uncertainties and make the fundamentals work for you!

US Interest Rate Slowdown?

The US Federal Reserve may refrain from more aggressive interest rate hikes in March due to geopolitical risks after Russia's special operation in Ukraine…

Bewitching predictions for 2022

Hello from the far 2022! FBS analysts have used some magic to travel to the future and brought you some hilarious predictions.

Popular

Walmart earnings outlook

Walmart is one of the biggest retail corporations in the US, with $244 billion in total assets. Does it worth buying amid rising prices and supply concerns that shatter the world economy?

Choose your payment system

Be on top of your game

Callback

Please fill in the form below so we can contact you

Select the best time for us to call you. We give calls from Monday to Friday in suggested intervals. In case we couldn't get through, we will try again at the same time the next day. For getting real-time assistance, use FBS chat.

We provide only English-speaking callbacks. If you prefer any other languages, contact the support team.

We will call you at the time interval that you chose

Change number

Your request is accepted.

We will call you at the time interval that you chose

Next callback request for this phone number will be available in 00:30:00

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later