Zuma dodges the bullet! But the Rand doesn't...

Can you believe it?

Zuma dodged the bullet again.

And the poor Rand just so happened to be standing right behind him, and was left no option but to take the hit.

Another week which started off well, with Speaker Mbete giving Parliament a chance with the Secret Ballot...

...only for the tables to turn once again.

It was a week of swings (180° degree ones to be exact), and the Rand took a beating.

Read on to get the full picture of how it all happened...

Friday's forecast warned us of further Rand weakness being just around the corner, with the Rand expected to break through the mental barrier of R13.50 in the coming days.

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With Speaker Mbete all out of time to make a decision, Monday became D-Day for her to make the all-important call as to whether the Secret Ballot were to go ahead.

It was a very important week in general, with this decision to come at 15:30 on Monday, the vote of #NoConfidence on Tuesday, and further economic events due too.

As if that was not enough - Moody's SA Ratings Review was due on Friday.

Thrown into the bunch was also a public holiday on Wednesday!

It was seen to be a "watershed week" for the Rand by some analysts, as the build up reached the pivotal point.

So, with volatility expected, the week began.

The Rand opened around R13.40, and was a little choppy in the opening hours of the day, leading up to Speaker Mbete's decision...

... and then the news hit!

In just one hour, the Rand moved over 20c, as it pin-dropped as low as R13.16/$ on the back of Mbete's decision to go ahead with the vote!

While a Zuma ousting was still regarded unlikely, it had definitely been given some positivity, and had dramatically increased public interest (locally and internationally).
The Rand then pulled back a little, to end the day over R13.20.

Onwards to Tuesday.

And despite SA's unemployment hitting a 14-year high of 27.7% (realistically more 40%+) , the Rand remained sturdy, as we edged closer to the vote.

General expectance was that we would see a divided ANC not provide enough support for opposing parties to get to the magic 201 number which would see Zuma in a whole pile of trouble. To make it even less likely, the opposing parties had a few missing members due to illness and other problems.

And as things started to get closer to the time, it felt like the Rand was on the edge of its seat, waiting for the outcome.

And then, in the evening, with the Rand at R13.20/$, it came...

In a nail-bitingly close result, Zuma had dodged the bullet...again!

With 177 votes for his removal, and 198 against it, the opposition had failed once again to convince sufficient ANC members to vote with their conscience.
Conscience? What conscience?

Well, clearly the market was aiming for someone or something to fall, the Rand took the bullet instead of Zuma.

In no time, it had spiked over R13.40/$, and all the good work had been undone...plus some!

Wednesday was a holiday, but it did not stop the Rand from weakening further...

It trended upward throughout the morning, making a punch as high as R13.53 in the mid afternoon.

The Rand then made up ground to end the day just above R13.42/$...it had been tough going considering it was a public holiday!

Our forecast came to end the day off - an expected outlook of the Rand strengthening down to R13.42-13.27 before we would see it bottom out in that area and head higher

Thursday took us one step closer to Moody's decision on SA's credit rating, but some persons were already looking forward to December.

December holds the ANC's next policy conference - with many feeling that Zuma is now on his 9th and final life...so expect some shake ups around that time.

On the other side of the pond, things are really heating up between the USA and North Korea, with Trump promising "fire and fury" and refusing to rule out a preemptive strike on the dangerous dictator Kim Jong Un and his country...

As for the markets - they took a turn for the better on Thursday, as per our forecast.

From mid-morning until mid-afternoon, the Rand made good progress as low as R13.31/$, right into our target area.

However, once it hit that level, things turned around.

And for the remainder of the afternoon and evening, the market weakened fast...

...and by 8am on Friday, we were back to R13.45!

With the closing honors for a difficult week to be decided, just Friday was left...

And initially, the Rand lost ground.

By midday, it had pipped the R13.51 level, and looked as if it had bottomed out.

All eyes were watching and waiting for Moody's call on the Credit Rating, as that seemed as if it were going to set the tone for the following week.

And unfortunately no news made its way to our desk before the close of the day...

The Rand quietly moved its way to close the week out in the mid R13.40s...

It looks a difficult week ahead for the Rand...

After the positivity which was buoyed by Speaker Mbete's decision on Monday had given a bit of spark to the markets, it was all downhill from there.

So...

• Zuma survived again
• Unemployment levels are breaking 14-year records as they hit 27.7%
• Another Credit Rating downgrade pending on Moodys' decision...

What more could go wrong?!

Well, it is worth bearing in mind that when sentiment reaches an extreme, it is due for a turnaround.

While we are not saying that it is at an extreme yet, our forecasts will certainly indicate when it is.

The Elliott Wave Principle - the human sentiment tracker - is one that can be trusted more than any indicator I know at a time like this.

Best regards,

James