Rand Report: The ZAR extends its rally on the back of Moderna’s vaccine news

Moderna gave emerging market assets a boost when news broke that their Covid-19 vaccine candidate was proven to be roughly 95% effective based on interim data. One of the biggest flaws of the Pfizer vaccine is that it has to be stored at -70 degrees Celsius. This is not a problem for Moderna’s. Their vaccine is stable for up to 30 days with regular refrigeration at around -2 degrees Celsius.

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Sable International. Image credit: Sable

This week, retail sales for September is due out for the Rainbow Nation. Market experts predict an increase of 5% – more positive signs that the economy is recovering. The South African Reserve Bank (SARB) will also be making its interest rate decision on Thursday. No change is expected from the current rate of 3.5%, but ZAR traders should keep their ears open for any hints that the Reserve Bank might make of possible easing in the future.

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This week the rand will largely be driven by vaccine news, along with increased cases in major economies. The SARB’s interest rate decision could also move rand pairs if there are any surprises, but restriction updates and general market risk sentiment will likely drive emerging market assets and the high-yielding currencies.

Market event calendar:

Wednesday 18 November:

  • UK: Inflation rate YoY – Expected 0.7%
  • Eurozone: ECB Non-monetary policy meeting

Thursday 19 November:

  • AUS: Unemployment rate – Expected 7.1%
  • Eurozone: Current account – Expected €24.5 B
  • SA: SARB rate decision

Friday 20 November:

  • UK: GFK consumer confidence – Expected -33
  • UK: Retail sales MoM – Expected 0.4%