South Africa’s Currency Market – Expert View

The South African Rand (ZAR) is making slow progress against global currencies as the current African National Congress (ANC) party has recently announced plans to take back land from private owners to use for public benefit without compensation. This expropriation applies to 139 farms in South Africa, where the National Executive Committee (NEC) and ANC agreed to this on a trial basis without compensation.

South Africa Currency Market Overview

GBP ZAR

The move was heralded as a political act to outflank the Economic Freedom Fighter’s (EFF) radical socialist agenda.

Generally speaking, currencies do not favour populism and tend to weaken, as has been shown by investor discomfort in the South African Rand this week.

The GBP-ZAR exchange rate was ar 17.5, reaching a 7.2 low point. Meanwhile, USD-ZAR exchange rate is at around 13.3, reaching a low of 12.1.

Uncertainty has certainly driven a weakening in the Rand from both a currency and bond yield perspective. The government have taken a decision to turn against one of it’s most important assets in a political move. Property is critical for South Africa’s economy, underpinning economic outlook from both social and financial perspective, as they hold a significant total value.

Macroeconomists, investors and markets will question their investment outlook on South Africa as the decision has been made to put one of the biggest asset classes in jeopardy.

The result of this decision is likely to also decrease foreign and trade flows into South Africa, as well as dampen investor confidence.

President Ramaphosa said just a few of days ago that the party would like to see a change to a specific section (25) of the SA Constitution to expropriate land without compensation.

What next for the Rand?

The ANC and President’s moved surprised markets as it undermines the legislative review processes which normally stand in place to allow changes to the constitution.

As the existing Section 25 constitutional provisions state, EWC still remains under question as to whether this change is within the current legislation.

The government still plans to boost growth and trade by increasing and supporting sectors affected by import duty surges such as sugar. The government announced that it will continue to invest in public infrastructure and support entrepreneurs and small and medium business.

When analysing markets or look at South African brokers to review for FX movements on major currencies such as ZAR, it’s important to look at forex signals.

What are Forex signals?

Forex signals are one of the most important tools in the foreign exchange market used primarily by forex traders to help them make critical decisions when it comes to forex trade. Forex signals have undeniably become popular globally. Various trading platforms such as the MT4 uses it forex signals as a tool for trade because it helps push forward the trading strategy of traders leading to an improvement in output and as a result an increase in the profit margins.

As a trader, you can obtain free Forex signals from some traders who have developed their own signal system or similarly at a small cost. Ideally, Forex signal is an alert system that keeps you updated as a trader to know the appropriate time to engage in forex trade while considering fluctuations.

It is this provided information about the correct timings that gives a trader an insight into the best time to trade to maximize profit. You can get signals through a free or a paid subscription system which allows you to get immediate alerts as soon as daring opportunities arises in the forex market.

Forex signals can be received via email, SMS, text, and even via some social media platforms. In most cases, these signals are up-to-date with the data you need to know about the market; something that can be vital in your decision-making process.

How FX signals system work

The main objective of Forex signals system is to assist traders to execute a successful trade. As a result, the system must have a group of professional traders experienced in the field who take inputs (critical market data). Thereafter, these experts engage in the technical and mathematical analysis to come up with an accurate output.

On the technical analysis of the market data, these experts consider all past information about price, including both short-term and long-term price trends. In some cases, the experts might incorporate the use of computer analysis to give an automated market analysis.

Mathematical analysis is based on current events and how the events might affect the price action over short and long periods. Once the analysis is done, a trader will receive the signals they are one of their subscribers which, and hence make an appropriate investment decision. That is the same principle under which CM trading bases its operational structure upon.

Types of Forex trade signals

  1. Getting FX signals from the signal provider

Different forex signals provider exist in the market with each having a specified fee. With a forex signal provider, you can get timely signals to help you know the best time to engage in forex trade. The fees form forex signal providers can be either flat monthly or quarterly fee, and fairly affordable in most cases.

  1. Copy trading

Copying other people’s trades is the most popular type of Forex signals. Just as the name suggests, copy trading involves monitoring the trades of other real traders, and if attractive, a trader can decide to follow/copy their trades. You can unconsciously copy another person’s trade and in return, get charged some small fee.

  1. Generating forex signals using algorithms

Algorithms are automated signals regarded to be the most accurate due to the scrutiny and analysis of charts they go through. In using algorithms, there is no human intervention involved to uncover the latest trends. Even though automated Forex signals can be quite accurate, a lot of people prefer signals generated by real human being who give relatively accurate predictions.

Summary

Markets and investors clearly see this as a political act and sideshow to the more important and radical moves made on property rights, one of the most important assets in South Africa.

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