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How the rand performed SONA to SONA

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President Ramaphosa delivers his State of the Nation Address (SONA) on Thursday 13 February 2020, and it’s expected to be a lively affair with the EFF promising to disrupt proceedings due to the lack of progress made on issues such as poverty, and because it wants public enterprises minister Pravin Gordhan fired (supposedly for making a dysfunctional Eskom “even worse.”

The following infographic from Peregrine takes a look at how the rand performed SONA to SONA over the last year. The market-moving events of the last year were in April, when Moody’s decided not to downgrade SA’s credit rating, resulting in an immediate strengthening in the rand.

By June the rand had spiked above R15 to the US dollar on fears of a global economic slowdown, then retreated to below R14 to the dollar on an improved economic outlook from the very same Moody’s (as well as lower interest rates in the US driving the search for yield – which pushed money into higher-yielding SA bonds).

This was followed by further weakness in the rand as US President Donald Trump called for a weaker dollar. The latest weakening in the rand is driven by a flight from risk (meaning investors jumping out of SA assets) due to the Coronavirus.