CAPE TOWN - Fake news has hit once again, this time it was coupled with foreign exchange speculation on Tuesday. The result of this was a stark 1.1% spike in the South African rand which briefly steered SA’s economy on a positive trajectory.
False reports surfaced on Tuesday that SA President Jacob Zuma had resigned. The rand then suddenly shot up, in the belief that a new President and leader would step up and succeed Zuma.
The rand rallied by almost 10 cents and coincidentally, the Presidency released a statement nearly the same time that President Zuma would be meeting with his Kenyan counterpart, Uhuru Kenyatta, on Thursday.
This false report was however misinterpreted. It is true, however that Zuma will be facing a possible oust from his office from within his party. Yet, this remains far from a resignation.
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“South Africa -- like a lot of emerging markets - is especially prone to this stuff because the politics are a lot stranger than developed markets have traditionally been and thus more subject to headline risk,” said Paul McNamara, a London-based fund manager at GAM UK Ltd.
Traders may have been further misled by reports of Zuma being lost.
Although, this was not the ANC President that was being referred to. Instead, it was South African-born entrepreneur, Elon Musks’ failed mission.
Musk’s Space Exploration Technologies Corporation launched a military satellite on Sunday.
The failed mission crashed into the sea, after it experienced a malfunction in the final stages of its ascent.
The mission, more commonly referred to as “Zuma”, took off from Cape Canaveral Air Force Station in Florida at 20:00 pm on a Falcon 9 rocket.
A spokesman from the U.S. Strategic Command said it had “nothing to add to the satellite catalog at this time” when after being asked if the new satellite was in orbit following reports that the rocket had crash-landed into the ocean.
The rand, for its part, eventually climbed back into positive territory and was up 0.3 % to 12.3489 per dollar as of 8:47 a.m. in New York.