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Cape Town — Currency traders are in for a rough ride this week as political pressures intensify both locally and internationally.

“We have to expect the unexpected in May, locally and internationally, with the second round of the election in France next Sunday and the UK election coming up early in June.

“Locally, the internal fight in the ANC was clearly apparent this weekend and the whole country is being drawn into it,” warned Umkhulu Consulting’s Adam Phillips.

He said in a note yesterday morning that currency operators were right to be nervous ahead of the politically charged weekend in South Africa.

“We did see an orderly move in the ZAR down to 13.22 on Friday, but despite month end and a thin market due to the Thursday holiday, it did not stay down there for long. “[Deputy President Cyril] Ramaphosa was out in KZN not sticking to the script, while our president [Jacob Zuma] was unable to speak in Bloemfontein yesterday. He was warned not to come and was given a bloody nose by a majority of the crowd. I am sure local politics will play a big role this month,” said Phillips.

He warned that investors will be nervous of politicians’ statements, possible physical violence and negative moves in the bond market.

Having touched R13.43/$ in New York on Monday night, the local unit was back at R13.35 against the greenback by 07:43 on Tuesday, “but expect some whippy moves this week and a wide range”, cautioned Phillips. — Fin24