In this special US election update, TreasuryONE’s Wichard Cilliers and Andre Botha examine potential market impacts of the upcoming US election, particularly regarding the South African Rand. As the tight race between Kamala Harris and Donald Trump draws closer, uncertainty around the outcome is expected to drive significant market volatility. If Harris wins, analysts expect a continuation of moderate monetary policies similar to the current administration, which could lead to a softer US dollar and a steady economic approach. Conversely, a Trump victory could strengthen the dollar in the short term due to proposed tariffs and an aggressive trade stance, particularly with China.
The discussion also highlights possible effects on equity markets. A Trump win could boost equities by lowering corporate tax rates and supporting the energy sector, whereas a Democratic win might introduce higher corporate taxes, potentially impacting profitability. Despite these differences, both candidates’ long-term fiscal spending plans are likely to lead to a weaker dollar over time.
Locally, the Rand is expected to experience heightened volatility depending on the election outcome. TreasuryONE advises exporters to be proactive and seize opportunities if the Rand reaches favourable levels. While a Trump victory may drive the Rand towards a higher trading range, both local and international factors will contribute to short-term fluctuations.
With the US election imminent, TreasuryONE anticipates a wide trading range for the Rand and advises close monitoring of market developments, as shifts in US policy and fiscal priorities could have considerable implications for global markets and currency dynamics.