Africa-Press – South-Africa. JOHANNESBURG – The rand lost its footing amid a scramble to cover shorts on a dollar turn after an initial sentiment boost on the back of a US blue sweep according to NKC Research.
With Democrats winning the two Georgia Senate run off races, they will hold a “soft” 50-vote majority. Control of the Senate will allow President-elect Biden to enact more of his ambitious fiscal agenda while boosting prospects for more fiscal stimulus and more rapid economic growth in 2021-22.
We expect additional fiscal stimulus will come in two forms. Congress will likely pass, on a bipartisan basis, additional stimulus checks totalling $1,400 (R21630.00) per person on top of the $600 checks passed at the end last year.
Thereafter, President Biden will attempt to pass some of his spending and tax proposals via the budget reconciliation process requiring only a simple majority. The third round of stimulus checks should lift GDP by 0.7 percent. We forecast real GDP growth will average 4.3 percent in 2021, following an anticipated 3.4 percent contraction in 2020.
At the close of local trade, the rand quoted weaker at R15.45/$. The local unit traded steady overnight. Expected range today R15.00/$ – R15.50/$.
South African bourse
The JSE All Share (+1.92 percent) rose for the fourth day in a row during Thursday’s session, in line with major global stock markets, amid expectations that US President-elect Joe Biden has a clearer path to boosting fiscal stimulus after the Georgia runoff. In the overall emerging market sphere, the MSCI Emerging Market Index (+0.99 percent) traded in the black.
Brent crude oil
The Brent oil price oscillated near multi-month highs yesterday, thanks to Saudi Arabia’s pledge to reduce crude output over the next two months, and lower US stockpiles. At the close of local trade, benchmark Brent crude futures quoted just above the $54pb mark. Crude prices traded slightly firmer during Asian trade this morning.
BUSINESS REPORT ONLINE
