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The rand isn't weak. It's the dollar that's strong. But it won't stay that way

17 July 2019 7:11 PM
Tags:
Rand
Dollar
Pound
Currency
The Money Show
US Dollar
Bruce Whitfield
Euro
George Glynos
ETM Analytics
British pound
currencies
japanese
trade-weighted
undervalued
overvalued
yen

The rand is trading at fair value. It’s the US dollar that's overvalued. Bruce Whitfield interviews George Glynos (ETM Analytics).
Picture: Supplied.

All eyes are turning back to the twin deficits… the combination is not good news for the dollar… data spanning 120 years… show the dollar is trading in a range that is unsustainable…

George Glynos, Head of Research - ETM Analytics

The South African rand is currently about 10% undervalued against the US dollar.

However, against a basket of trade-weighted currencies, it’s only about 5% undervalued.

The rand is slightly overvalued against the euro and 10% overvalued against the British pound.

Against the Japanese yen, the rand is now 15% overvalued.

In other words, the rand is trading at a reasonably fair value.

It is the US dollar that is overvalued.

The Money Show’s Bruce Whitfield interviewed George Glynos, Head of Research at ETM Analytics.

Listen to the interview in the audio below (and scroll down for more quotes from it).

Currencies are known to reflect the disparities between inflation rates of countries…

George Glynos, Head of Research - ETM Analytics

The UK… that’s easy; we know what’s driving it… developments on the Brexit front… We’ve got a good idea why it’s underperforming…

George Glynos, Head of Research - ETM Analytics

Unless your economy is completely falling apart – ala Zimbabwe or Venezuela – you should get a recovery [after a currency has depreciated], because there is a self-correcting mechanism.

George Glynos, Head of Research - ETM Analytics

We think there’s scope for the Sarb to move and we think they will.

George Glynos, Head of Research - ETM Analytics

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17 July 2019 7:11 PM
Tags:
Rand
Dollar
Pound
Currency
The Money Show
US Dollar
Bruce Whitfield
Euro
George Glynos
ETM Analytics
British pound
currencies
japanese
trade-weighted
undervalued
overvalued
yen

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