JOHANNESBURG – A sense of anticipation is set to sweep across the South African economy in the week ahead as investors brace for the latest retail sales data.
Given how consumption accounts for roughly 60 percent of the nation’s gross domestic product (GDP), the pending retail sales will be closely scrutinized by market players. Retail sales are expected to jump 2 percent year on year in September, from the 1.1 percent seen in the prior month.
A solid report should boost appetite towards the Rand and investor sentiment towards Africa’s most industrialized economy. While Rand will be influenced by domestic economic data, external drivers will also impact the currency’s valuation.
US-China trade developments and Brexit drama will most likely play a role in where the Rand concludes the year. While the local currency could be offered a welcome boost in the event of a trade deal between the world’s two largest economies, this positivity could be quashed by the Brexit uncertainty.
It must be kept in mind that South Africa is positioned to be one of the many causalities from Brexit as it remains one of the UK’s largest trading partner with total trade roughly $11.6 billion in 2018.