Katy Barnato
Source: <a href="https://www.cnbc.com/2016/03/18/drought-mudslinging-casts-gloom-on-south-africa.html">Drought, mudslinging casts gloom on South Africa</a>
Prospects for Africa&#8217;s second-largest economy looked gloomy on Friday, after the central bank hiked interest rates at a time of slumping economic growth, drought and a political power battle.
 Faced with the coupling of a worsening growth outlook and inflationary pressures, the South Africa Reserve Bank opted to hike the repurchase interest rate by 25 basis points to 7 percent. The bank also cut its prediction for growth in 2016 and 2017 to 0.8 percent and 1.4 percent respectively. 
<img loading="lazy" decoding="async" src="https://image.cnbcfm.com/api/v1/image/103481082-South_Africa_drought.jpg?v=1529471003&amp;w=1910&amp;h=1000" data-licensor-name="hsaan Haffejee | Anadolu Agency | Getty Images" width="1910" alt="Livestock in Free State, South Africa are struggling to find water due to the drought." height="1000"></img>
 As a drought intensifies food price pressure, inflation is seen averaging 6.6 percent this year, having jumped to 6.2 percent in the year to January. The drought is one of the worst on record, necessitating imports of key crops and pushing up food prices, as well as leading the government to reallocate spending to provide drought relief. 
 Earlier this month, Moody&#8217;s Investors Service placed South Africa&#8217;s &#8220;Baa2&#8221; rating on review for downgrade. A cut of two notches or more would take South Africa&#8217;s rating to non-investment or &#8220;junk&#8221; grade, a judgment on the country&#8217;s ability to repay lenders. This could sharply hike the nation&#8217;s borrowing costs and cast doubt on its policymakers&#8217; ability to manage the economy. 
 Rival agencies Standard &amp; Poor&#8217;s and Fitch rate South Africa at &#8220;BBB-&#8220;. That&#8217;s equivalent to a Moody&#8217;s rating of &#8220;Baa3&#8221; and only one notch off junk territory. 
Graft allegations
 The economic fears come as a crisis envelops South Africa&#8217;s ruling elite. A well-known business family with ties to President Jacob Zuma stands accused of exercising undue influence over political appointments. 
 The latest complainant is the former boss of South Africa&#8217;s state-run power firm, Eskom. On Friday, South Africa&#8217;s Mail &amp; Guardian newspaper cited Zola Tsotsi as saying that he had been pushed out of his role by the Gupta family for &#8220;not playing the game.&#8221; 
 The Indian-born Guptas were also accused this week of offering cabinet posts to two politicians of the ruling ANC, according to media reports. 
 Deputy Finance Minister Mcebisi Jonas said on Wednesday that the Gupta family had offered him the role of finance minister, shortly before Nhlanhla Nene was sacked from the position in December, according to Reuters. 
 The Guptas have denied trying to influence political appointments, the news agency said. 
 The removal of Nene saw the South African rand depreciate sharply and piqued investors&#8217; concerns about the government. 
 Now, the longevity of Nene&#8217;s successor as finance minister, Pravin Gordhan, seems precarious. 
 &#8220;It seems that Gordhan has never been fully accepted in his post and we would not be surprised if he were eventually pushed out. To state the obvious, markets would not take that well,&#8221; Win Thin, head of emerging market currency strategy at BBH, said in a note on Wednesday. 
 Follow CNBC International on Twitter and Facebook.

Drought, mudslinging casts gloom on South Africa

Katy Barnato
Source: <a href="https://www.cnbc.com/2015/12/15/after-brazil-is-south-africa-the-next-em-to-go-bad.html">After Brazil, is South Africa the next EM to go bad?</a>
 Slowing growth, financial market instability and political turmoil — could South Africa be the next major emerging market to follow Brazil and lose its investment grade rating? 
 Africa&#8217;s most developed economy has just racked up its third finance minister in five days, raising fears among economists that the country&#8217;s political and economic problems could see the country&#8217;s credit rating diving into &#8220;junk&#8221; territory. 
 As of December, Standard &amp; Poor&#8217;s (S&amp;P) and Fitch Ratings rate South Africa&#8217;s credit worthiness at just one notch above junk status, at BBB-minus. Moody&#8217;s Investors Service rated it one degree higher than its rivals, at Baa2 (equivalent to BBB.) 
 Analysts at private bank Brown Brothers Harriman (BBH) and emerging markets (EM) specialist, Renaissance Capital, forecast South Africa&#8217;s rating will be cut further in 2016, hitting the country&#8217;s economic status as it will find it more and more expensive to raise money. 
 &#8220;We reiterate our long-standing call that the nation gets cut to sub-investment grade, and now it&#8217;s likely sooner rather than later… We think a downgrade is a done deal,&#8221; BBH said in a report on Friday. 
<img loading="lazy" decoding="async" src="https://image.cnbcfm.com/api/v1/image/100550573-cape-town-south-africa-gettyp.jpg?v=1532564710&amp;w=1910&amp;h=1000" data-licensor-name="Hoberman Collection | Universal Images Group | Getty Images" width="1910" alt="Cape Town, South Africa" height="1000"></img>Similarities with Brazil
 Brazil and South Africa are among the largest economies on their respective continents and both have suffered slowing economies and cuts to their credit ratings this year. 
 S&amp;P cut Brazil&#8217;s rating to junk status in September and Fitch slashed its rating to the lowest investment grade in October. Moody&#8217;s put Brazil&#8217;s rating on review for a cut to junk earlier in December. 
 &#8220;EM is under stress… Up to this week, we were worried about Brazil, Russia and Turkey among many others. Then last week, South Africa joined the club,&#8221; Demetrios Efstathiou, head of trading strategy at ICBC Standard Bank, said in a report on Monday. 
 &#8220;Will South Africa become a second Brazil? The thought is very scary,&#8221; he later added. 
Pressure on presidents
 A series of bruising political missteps and scandals has raised doubt over the abilities of Brazil&#8217;s Dilma Rousseff and South Africa&#8217;s Jacob Zuma to rejuvenate their economies — and their futures. 
 Brazil&#8217;s congress launched impeachment proceedings against Rouseff this month and the sacking of the South African finance minister last week and his replacement with first one candidate and then another in a matter of days has cast doubt over Zuma&#8217;s leadership. 
 &#8220;Rating agencies will &#8216;wait and see,&#8217; but are highly discomfited by Zuma&#8217;s move,&#8221; Barclays analysts said in a report on Tuesday. 
 &#8220;The surprising sequence of events… has raised the question of whether President Zuma will continue in office or whether a political formula will be found to see him leave the stage,&#8221; they added later. 
Slowdown vs. deep recession
 Both countries&#8217; economies have slowed this year and their currencies have tanked, in part due to waning investor sentiment on EM and expectations about when the U.S. Federal Reserve will raise interest rates. 
 South Africa&#8217;s economy has been hit by the slump in international commodity prices, contracting by a seasonally adjusted annualized 1.3 percent between April and June, quarter-on-quarter, and growing by only 0.7 in the third quarter, according to preliminary official estimates. 
 Official data on Tuesday showed that South African non-farm payrolls for the third quarter inched up 0.1 percent on the previous three months, but remained flat on the same period the year before. 
 However, South Africa&#8217;s economy is expected to grow across each of 2015 and 2016, with Barclays analysts forecasting expansion of 1.4 percent this year and 1.8 percent next. 
 By comparison, Brazil is far worse off, mired in a steep recession, with Barclays forecasting its economy will shrink by 3.8 percent this year and 2.8 percent in 2016. 
 &#8220;Brazil&#8217;s political fragility increased significantly this year, but we think the political crisis is not over. The risk of Rousseff&#8217;s impeachment remains elevated in 2016 and an expanding corruption scandal threatens further economic deterioration,&#8221; Alberto Gallo, head of global macro credit research at RBS, said in a report last week. 
 — Follow CNBC International on Twitter and Facebook.

After Brazil, is South Africa the next EM to go bad?

Katy Barnato
Source: <a href="https://www.cnbc.com/2015/12/14/south-africa-gets-third-finance-minister-in-5-days.html">South Africa gets third finance minister in 5 days</a>
 The South African rand rallied on Monday after the country&#8217;s embattled president, Jacob Zuma, bowed to market and political pressure and appointed his third finance minister in five days. 
 The benchmark Johannesburg All Shares Index traded as much as 2 percent higher on Monday, before paring gains, and shares in South Africa&#8217;s banking index soared up to 16 percent on the news that Zuma had replaced his new finance minister with the more experienced Pravin Gordhan late on Sunday. 
 The currency gained up to 5.2 percent against the U.S. dollar, 5.5 percent versus the euro and 5.7 percent against sterling. 
<img loading="lazy" decoding="async" src="https://image.cnbcfm.com/api/v1/image/101580211-183544339.jpg?v=1532564506&amp;w=1910&amp;h=1000" data-licensor-name="Jason Alden | Bloomberg via Getty Images " width="1910" alt="South African Finance Minister Pravin Gordhan" height="1000"></img>
Zuma&#8217;s U-turn came after the president sacked the previous finance minister, Nhlanhla Nene, last week and replaced him with outsider David van Rooyen. He then changed his mind following a wave of criticism and turmoil in currency, credit and equity markets at the end of the week. 
 &#8220;On the 9th of December 2015, I announced the appointment of a new Minister of Finance, Mr David van Rooyen. I have received many representations to reconsider my decision. As a democratic government, we emphasize the importance of listening to the people and to respond to their views,&#8221; Zuma said in a statement on the South African government news agency late on Sunday. 
 &#8220;In this regard, I have, after serious consideration and reflection, taken the following decision; I have appointed Mr Pravin Gordhan, the current Minister of Cooperative Governance and Traditional Affairs as the new Minister of Finance.&#8221; 
 Gordhan previously held the role of finance minister between 2009 and 2014, before becoming minister of cooperative governance and traditional affairs in May last year. 
 The rand is seen posting its strongest daily percentage gain on Monday since 2008, according to Reuters, due to relief at Gordhan&#8217;s appointment. 
 London-listed shares of InvestecINVP-GB and Old MutualODMTY — two international banks that were founded in South Africa — traded as much as 10 percent higher on Monday, putting them among the top-performing stocks across Europe. 
 However, the revolving door at South Africa&#8217;s finance ministry highlights doubts about Zuma&#8217;s judgment. 
 Both Fitch Ratings and Standard &amp; Poor&#8217;s (S&amp;P) have cut their ratings and outlooks on South Africa&#8217;s sovereign debt earlier this month. Both Fitch Ratings and Standard &amp; Poor&#8217;s (S&amp;P) cut their ratings and outlooks on South Africa&#8217;s sovereign debt earlier this month. 
 &#8220;Zuma knows the investment grade rating is in serious trouble. So what does he do? He fires the one guy that&#8217;s been trying to protect that rating. Nene&#8217;s removal suggests that there was a clash with President Zuma about how deep the fiscal cuts should be,&#8221; Brown Brothers Harriman (BBH) currency strategists said in a report on Friday.
 Moody&#8217;s Investors Service rates South Africa&#8217;s debt one notch higher than S&amp;P and Fitch, at Baa2 on its scale. 
 However, BBH rates the country at a lower BB/Ba2/BB, suggesting that South Africa&#8217;s credit worthiness has already fallen into speculative or &#8220;junk&#8221; territory. 
 &#8220;We reiterate our long-standing call that the nation gets cut to sub-investment grade, and now it&#8217;s likely sooner rather than later… We think a downgrade is a done deal,&#8221; BBH said. 
 Nigeria overtook South Africa as Africa&#8217;s biggest economy after the latter country rebased its gross domestic product (GDP) calculations in 2014. South Africa&#8217;s economy is seen growing by 1.4 percent in 2015 and 1.3 percent in 2016, according to the International Monetary Fund. 
 — By CNBC&#8217;s Katy Barnato. Follow CNBC International on Twitter and Facebook.

South Africa gets third finance minister in 5 days

Katy Barnato
Source: <a href="https://www.cnbc.com/2015/05/29/nigerias-reinstaled-ex-dictator-draws-up-tough-to-do-list.html">Nigeria’s new president draws up tough to-do list</a> 
<img loading="lazy" decoding="async" src="https://image.cnbcfm.com/api/v1/image/102557552-468259620.jpg?v=1532564324&amp;w=1910&amp;h=1000" data-licensor-name="AFP | Getty Images" width="1910" alt="Nigeria's Muhammadu Buhari" height="1000"></img>
 Nigeria&#8217;s new president was sworn in on Friday in the country&#8217;s first ever democratic handover of power. He faces a tough battle to diversify an economy reliant on oil and hampered by terrorism and endemic corruption. 
 Retired major-general Muhammadu Buhari won the 2015 election as a self-described &#8220;converted democrat,&#8221; taking over from incumbent Goodluck Jonathan. However, it&#8217;s not the first time he has led the country—he ruled as dictator between 1983 and 1985, after taking power in a coup. 
 &#8220;The common themes raised by all we met focused on the need for good governance, security and an end to systemic corruption,&#8221; said Kato Mukuru, global head of research at Exotix Partners, in a research note published after the election results. 
 &#8220;President-elect Buhari and Vice President-elect Osinbajo are universally accepted as being the right team to deliver on this, but after being disappointed on many occasions by their leaders, many people were hopeful, rather than expectant.&#8221; 

&#8216;Severe&#8217; terror risk
 Buhari&#8217;s military credentials have increased expectations that he will do better in tackling Boko Haram than his predecessor. The militants have wreaked havoc in the north-east of the country in a six-year killing and kidnapping spree aimed at establishing an Islamic caliphate. 
 The chaos has deterred some investors from Africa&#8217;s biggest oil producer, although Nigeria&#8217;s commercial hub of Lagos is located far away from Boko Haram territory. 
 The country as a whole is rated at &#8220;severe&#8221; risk of terrorism and political violence—on a par with Syria, Iraq, Yemen and Afghanistan—by global risk consultancy Aon. 
Read MoreEurope, Canada face rising terror threat
 Two Nigerian cities—Jos and Abuja, the capital city—are at &#8220;extreme&#8221; risk of terrorism, with the latter suffering four attacks and 177 deaths in the year to February, according to political risk consultancy Verisk Maplecroft. It said that the risk of terrorist attacks rose in 13 Nigerian cities during the time period. 
 &#8220;While Boko Haram will remain the dominant terrorist threat in Nigeria, Verisk Maplecroft believes there is a possibility of hostilities resuming in the Niger Delta following the election of Mohammed Buhari,&#8221; the consultancy said in a statement this month. 
 &#8220;The amnesty protecting members of the militant group MEND is due to lapse and without successful negotiations this could mean disruption to the country&#8217;s vital oil industry, in addition to attacks on key cities in the south east of the country.&#8221; 
<img loading="lazy" decoding="async" src="https://image.cnbcfm.com/api/v1/image/100552147-Nigeria.jpg?v=1406096289&amp;w=1910&amp;h=1000" data-licensor-name="AFP/Stringer | AFP | Getty Images" width="1910" alt="" height="1000"></img>Over-reliance on oil
 Nigeria&#8217;s economy grew at 4 percent year-on-year in the first three months of 2015, which was its slowest rate of expansion since early 2012, according to Capital Economics. The independent research firm attributed this in part to country&#8217;s reliance on energy production: Oil and gas accounts for 35 percent of its economy, according to the Organization of the Petroleum Exporting Countries (OPEC), of which Nigeria is the most populous member. 
 Buhari &#8220;will struggle to diversify the economy (away from energy),&#8221; Capital Economics warned in a report on frontier markets last week. 
 In March, Standard &amp; Poor&#8217;s lowered its credit rating on Nigeria from BB-minus to B-plus, because of the impact of oil prices. 
Read MoreWill Kurdistan sell oil if Baghdad doesn&#8217;t pay?
 On the upside, weak prices could provide the impetus for much-needed reforms and balancing of the books. 
 &#8220;We believe the low oil price combined with a change in the government provides the best opportunity in years to push forward reforms in Africa&#8217;s largest economy,&#8221; said economists at Renaissance Capital in a report this month. The frontier market specialist company said that investors should no longer be underweight on Nigeria. 
Corruption hopes and fears
Buhari&#8217;s previous time in charge as dictator has raised human rights concerns but he does have a reputation for incorruptibility, a factor that helped him to power. 
 Although he is yet to appoint his cabinet, the president is expected take a lead in tackling corruption within the oil and gas sector, with Vice President Yemi Osinbajo heading up the fight in all other industries. 
 &#8220;An improvement in corruption should improve Nigeria&#8217;s fiscal situation and improve equity investors&#8217; perception of the country,&#8221; said Renaissance Capital in a report last week. 
 The emerging market investment bank said that Nigeria&#8217;s corruption problem was in line with expectations, when compared to other countries with low gross domestic product (GDP) per capita that are oil exporters. 
 &#8220;Improving Nigerian corruption would be far easier to achieve if Nigeria ran out of oil,&#8221; Renaissance Capital said. 
 It was upbeat on the country&#8217;s long-term economic forecast. 
 &#8220;We think Nigeria will be a trillion dollar economy by 2025 (the U.S. Department of Agriculture thinks 2030) and it will keep doubling every 10 years pushing per capita GDP to around $15,000 in 2050.&#8221;

Nigeria’s new president draws up tough to-do list

Katy Barnato
Source: <a href="https://www.cnbc.com/2015/02/04/next-stop-for-islamic-finance-africa.html">Next stop for Islamic finance… Africa?</a>
The U.K. and Hong Kong opened their doors to Islamic finance with high-profile &#8220;sukuk&#8221; debuts in 2014, but in the coming year, African countries might create waves in the $100 billion-a-year debt market. 
 Sukuk issuance is a form of financing used by both Islamic governments and companies that is compliant with Islamic sharia law – which sees the generation of income from interest as usury. Sukuks are commonly likened to conventional bonds, but differ in that investors receive a share of an underlying asset, along with the commensurate cash flows and risk, rather than ownership of just a debt. 
<img loading="lazy" decoding="async" src="https://image.cnbcfm.com/api/v1/image/102256675-51426033r.jpg?v=1532564367&amp;w=1910&amp;h=1000" data-licensor-name="Derrick Ceyrac | AFP | Getty Images" width="1910" alt="Jankara market, located on Lagos Island and the skyline of Lagos, Nigeria." height="1000"></img>
 Credit rating agency Standard &amp; Poor&#8217;s sees total sukuk issuance across the world for 2015 at $100-$115 billion. For comparison, the global debt market stands at around $100 trillion in amounts outstanding. 
 Several countries in North and sub-Saharan African are already planning sukuk debuts for this year, including Tunisia, Egypt, Nigeria and Kenya. This follows first-time issues by South Africa and Senegal—as well as the U.K., Luxembourg and Hong Kong—in 2014. 
 &#8220;The Senegal issuance could open the market for Africa,&#8221; Mohamed Damak, global head of Islamic finance at Standard &amp; Poor&#8217;s said on Wednesday at a news conference. 
 In Damak&#8217;s opinion, sukuks provide a natural answer to African governments&#8217; need to remedy a lack of infrastructure in their countries, given that this type of issuance requires an underlying asset that could be a finance project. 
 &#8220;Infrastructure spending and Islamic finance can combine naturally,&#8221; he said.

Next stop for Islamic finance… Africa?

Kelley Holland
Source: <a href="https://www.cnbc.com/id/49355351">Dollar Lifts, Euro Dips, the IMF Gets Gloomy</a> 
<img loading="lazy" decoding="async" type="image" src="https://image.cnbcfm.com/api/v1/image/41461441-fx_fix_1_200.jpg?v=1354732729&amp;w=1910&amp;h=1000" data-licensor-name="" width="1910" alt="" height="1000"></img>
Earnings weigh on risk and the IMF issues a euro zone warning &#8211; it&#8217;s time for your FX Fix.
Concerns about corporate earnings dampened risk appetite, and the dollar held near a one-month high. [CNBC]
Leaders&#8217; stuttering progress in addressing the euro zone crisis put pressure on Spanish and Italian bonds, and sent the euro lower. [CNBC]
The IMF warned in a new report that the euro zone is at risk of a &#8220;downward spiral of capital flight, breakup fears and economic decline.&#8221; [actionforex.com]
Downbeat consumer sentiment data sent the Australian dollar lower. [WSJ]
The Bank of Japan said the strong yen was a factor in its latest rate cut, which could fuel market expectations for a new cut if the currency rises further. [WSJ]
Reports that South Africa&#8217;s labor strife may be close to a resolution sent the battered rand higher. [WSJ]
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MULTI CURRENCIES VS THE DOLLAR 
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Dollar Lifts, Euro Dips, the IMF Gets Gloomy

Kelley Holland
Source: <a href="https://www.cnbc.com/id/49336847">Why the South African Rand May Go Further South</a> 
<img loading="lazy" decoding="async" type="image" src="https://image.cnbcfm.com/api/v1/image/49328560-south-african-miners-protest2-20121005-200.jpg?v=1350440843&amp;w=1910&amp;h=1000" data-licensor-name="" width="1910" alt="Striking mine workers demonstrate outside the Anglo American Mine in Rustenburg. South African." height="1000"></img>
Labor unrest in South Africa is weighing on the rand, and this strategist sees more weakness ahead.
It&#8217;s been a rough time in South Africa lately, with labor unrest roiling the country &#8211; and the currency. 
But if you think it&#8217;s time for the rand to turn around, think again, says Amelia Bourdeau, director of foreign exchange at Westpac Institutional Bank. 
I don&#8217;t want to fight the trend,&#8221; she told CNBC&#8217;s Melissa Lee, since so much of the trading in the rand is driven by electronic models. So when the models flip, Bourdeau says, &#8220;you don&#8217;t want to fight that flow because the macro flow in the FX market in terms of rand is much smaller than this e-flow.&#8221; Instead, she says, &#8220;you really have to wait until these models decide to turn around and go long rand and you can jump on the trade.&#8221;
Bourdeau sees more opportunity selling the euro&nbsp;&nbsp;against the Canadian dollar. She is unimpressed by Monday&#8217;s developments at the euro zone finance ministers&#8217; meeting, arguing that investors really just want to see Spain request a bailout. But she likes the latest &#8220;blockbuster&#8221; employment report from Canada. 
Bourdeau wants to sell the euro against the Canadian dollar at 1.2660 with a stop at 1.2810 and a target of 1.2350.
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Talk back: Tell us what you want to hear about &#8211; email us at moneyinmotion@cnbc.com.

Why the South African Rand May Go Further South

Source: <a href="https://www.cnbc.com/id/49329798">South Africa Stocks Downgraded as Mining Troubles Spread</a>
With tensions once again rising in South Africa’s mining sector, investment bank Merrill Lynch has cut its weighting to the country’s stock market and mining sector.
<img loading="lazy" decoding="async" type="image" src="https://image.cnbcfm.com/api/v1/image/49328560-south-african-miners-protest2-20121005-200.jpg?v=1350440843&amp;w=1910&amp;h=1000" data-licensor-name="" width="1910" alt="Striking mine workers demonstrate outside the Anglo American Mine in Rustenburg. South African." height="1000"></img>
The firm downgraded the country’s resources sector from neutral to underperform. “Net-net, we’re now underweight the country,” it said in a research note published on Monday.
On Friday, Anglo American Platinum fired 12,000 workers after they went on an illegal strike. The move came a day after a company employee was shot dead near Rustenburg following clashes between police and striking workers. In August clashes at the Lonmin mine in South Africa left 44 people dead and that unrest has now spread to other companies across the area as workers seek higher wages.
Stocks in firms exposed to South African mining were trading firmly in the red on Monday. London-listed shares of Lonmin were trading over 4 percent lower, while shares of Anglo American , which holds a majority stake in Anglo Platinum, and Aquarius also fell. 
“If the end result of the strikes is just higher wages, then that means we have plenty of strikes ahead of us as contagion will keep spreading,” Merrill Lynch said.“In the best case scenario of government support for industry in its battle to restrain cost pressures (both at a micro and macro level), then it seems we still will have a bit more confrontation ahead of us.” &nbsp;South Africa had been seen as something of a safe haven for investors in recent years with share prices hitting record highs but Merrill Lynch said that their optimism is waning.“With the current greater appetite for risk globally and the strain of South Africa’s heavy strike disturbances, we’re finding a considerably less receptive audience to our thesis that the well owned South Africa consumer is a major beneficiary of lower for longer global rates.”“Ultimately we expect to again push this theme with passion. But in the short window to year end, it seems difficult to defend an overweight. We downgrade (South Africa) consumer to neutral.”However, the investment bank did note that once the wage spike had been dealt with, it would have a longer-term positive effect.
“If the end result is a clear message to unions that the days of freebie inflationary wage hikes are over, this just may be the period when South Africa finally introduced some economic sanity to its labor policies,” it said.

South Africa Stocks Downgraded as Mining Troubles Spread

Kelley Holland
Source: <a href="https://www.cnbc.com/id/49326856">Dollar Lifts, Euro Sinks, Iran Cracks Down</a> 
<img loading="lazy" decoding="async" type="image" src="https://image.cnbcfm.com/api/v1/image/41461441-fx_fix_1_200.jpg?v=1354732729&amp;w=1910&amp;h=1000" data-licensor-name="" width="1910" alt="" height="1000"></img>
Investors fret over the global economy and Iran gets tough on currency traders &#8211; it&#8217;s time for your FX Fix. 
Renewed worries about the global economic outlook sent the safe-haven dollar and yen higher. [CNBC]
The Australian and New Zealand dollars fell amid concerns about the global economy and indications of further softening in the Australian labor market. [CNBC]
With a meeting of euro zone finance ministers looming and Spain&#8217;s economy teetering, the euro fell. [WSJ]
Labor unrest continued in South Africa, and the rand continued its slide. [WSJ]
In an effort to force the rial higher, Iranian officials are forcibly shutting currency trading shops and arresting traders. [FT]
With questions persisting over an international financing deal,Hungary&#8217;s forint led emerging European currencies lower. [CNBC]
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CURRENCY FUTURES:
Tune In: CNBC&#8217;s &#8220;Money in Motion Currency Trading&#8221; airs on Fridays at 5:30pm and repeats on Saturdays at 7pm. 
Learn more: The essential vocabulary for currency trading is on Key Currency Terms. Top strategies are broken down for you in Currency Class. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Talk back: Tell us what you want to hear about at moneyinmotion@cnbc.com.

Dollar Lifts, Euro Sinks, Iran Cracks Down

Kelley Holland
Source: <a href="https://www.cnbc.com/id/49299850">Euro Hangs In, Rand Takes a Hit</a> 
<img loading="lazy" decoding="async" type="image" src="https://image.cnbcfm.com/api/v1/image/41461441-fx_fix_1_200.jpg?v=1354732729&amp;w=1910&amp;h=1000" data-licensor-name="" width="1910" alt="" height="1000"></img>
A jobs report looms and South African unrest weighs on the rand &#8211; it&#8217;s time for your FX Fix.
With leading indicators suggesting the nonfarm payroll report may disappoint, the dollar and yen were poised to rise on demand for safe havens. [dailyfx.com]
The euro hovered near a two-week high after the European Central Bank assured investors it was ready to buy bonds to tackle the debt crisis. [CNBC]
After the Bank of Japan left interest rates unchanged, as expected, the yen briefly edged higher. [Reuters]
South Africa&#8217;s rand plunged two percent amid labor unrest. [CNBC]
With the U.S. nonfarm payroll report looming, the Australian dollar nudged lower. [WSJ]
The euro zone economy contracted more rapidly in the second quarter than expected. [WSJ]
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MULTI CURRENCIES VS THE DOLLAR 
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Euro Hangs In, Rand Takes a Hit

Kelley Holland
Source: <a href="https://www.cnbc.com/id/49166212">Those Central Bank Moves Are Taking a Toll</a> 
<img loading="lazy" decoding="async" type="image" src="https://image.cnbcfm.com/api/v1/image/44144989-thumbs_up_down2_200.jpg?v=1347772530&amp;w=1910&amp;h=1000" data-licensor-name="Johner | Getty Images" width="1910" alt="" height="1000"></img>
Investors know what they want, and it isn&#8217;t the G4 currencies.
When the European Central Bank, the Federal Reserve, and the Bank of Japan all announced big stimulus measures earlier this month, investors went on a buying spree. They&#8217;re still buying &#8211; but they&#8217;re steering clear of the biggest, most liquid currencies, known as the G4. 
&#8220;The USD is the second worst performer among majors and ZAR, &nbsp;&nbsp;NOK, RUB, TRL, NZD, SEK &nbsp;&nbsp;and MXN &nbsp;&nbsp;are the top seven performers,&#8221; wrote Steven Englander, global head of G10 FX strategy at Citigroup , in a note to clients. &#8220;The bottom five are CAD, USD, EUR, GBP, JPY.&nbsp;&nbsp;This is less risk-off than G4 off.&#8221;
Samarjit Shankar, a global FX strategist at Bank of New York Mellon, sees a similar shift. Investors are &#8220;making renewed forays into select higher yielding currencies such as the Brazilian real, Turkish lira, Philippine peso,&#8221; and others, he says.
A stronger than expected consumer confidence report, along with better than expected retail sales data from Canada, are probably helping risk-sensitive currencies. And the stimulus plans from the Bank of Japan and the Fed may be better understood than the European Central Bank&#8217;s plan for Outright Monetary Transactions, or OMT. &#8220;At a minimum it looks like investor uncertainty about how OMT will play out is trumped by the certainty over how QE3 and other G4 liquidity provision programs will play out,&#8221; Englander says. 
Step lively. 
Tune In: CNBC&#8217;s &#8220;Money in Motion Currency Trading&#8221; airs on Fridays at 5:30pm and repeats on Saturdays at 7pm. 
Learn more: The essential vocabulary for currency trading is on Key Terms Dictionary. Top currency strategies are broken down for you in Currency Class. 
Talk back: Tell us what you want to hear about &#8211; email us at moneyinmotion@cnbc.com.

Those Central Bank Moves Are Taking a Toll

Source: <a href="https://www.cnbc.com/id/49084251">South Africa: the Unlikely New Safe Haven?</a>
A murky political climate, an angry, strike-prone workforce and an economy unable to generate jobs for a quarter of its adults. A recipe for a Greek-style financial tragedy?
<img loading="lazy" decoding="async" type="image" src="https://image.cnbcfm.com/api/v1/image/49104750-south-african-mine-protesters-200.jpg?v=1350440843&amp;w=1910&amp;h=1000" data-licensor-name="Alexander Joe | AFP | Getty Images" width="1910" alt="Striking miners listen to a speaker after they secured a 22 percent pay hike from London-listed Lonmin platinum mine in Marikana on September 18, 2012." height="1000"></img>
Not in South Africa, where those bitter ingredients have failed to sour investor appetitite for equities. Just weeks after violent protests and work stoppages at the nation’s most productive mines, South African share prices are hitting successive record highs. And despite question marks over President Jacob Zuma’s leadership of the African National Party, the rally is set to continue.
“The political uncertainty is less of an issue now, said Froz Bassa, portfolio manager at Electus in Cape Town, a boutique owned by the Old Mutual Investment Group. “People are a lot less concerned. It’s not as bad as it was in 1994.”
Ironically, investors are viewing South Africa as something of a safe haven from the financial hurricane gripping Europe, a storm that might ultimately fell the exporting economies of the Far East.&nbsp; 
It’s an attractive market “relative to other places you can put money,” said Richard Middleton, a portfolio manager at Investec Asset Management in Cape Town, citing a stable rand and low-bond yields, courtesy of foreign buying. “Economically we’re doing fine. We don’t have a banking crisis.”
It would have been a different story had recent labor-related violence, namely the protests at the Marikanamine that left more than 40 dead, occurred a decade earlier. “If Marikana had happened then, it would have blown out the rand,” said Middleton.
The volatile mining sector had become less attractive to foreigners even before the recent deterioration of labor relations. Domestic investors have plugged the gap, but resource shares trade on a one-year rolling average of just ten times earnings, said Middleton.&nbsp; 
That could lure foreigners back to the sector. Lonmin, owner of the Marikana mine, rose sharply in London trading Wednesday, after a resolution of that bitter labour dispute. 
Resource shares comprise nearly 40 percent of the South African market but it’s the industrial companies that have been quietly powering the rally. The banking and retail sectors have been a magnet for foreign investment. Middleton estimates that between 50 and 75 percent of retail shares are held by offshore funds, looking to invest in companies with pan-African reach.
“If you look at valuations [of industrial shares], they’ve been cheap relative to other emerging markets” such as Turkey or Russia, he said. But with industrials now trading at approximately 22 times earnings, the upside for the sector is limited, he added. 
Bassa agreed that a resurgent resource sector could continue to power the South African indices to record highs. “South Africa is linked to the global environment” through commodity exports, he said.
Chinese and Japanese pledges to increase infrastructure investment, along with a third round of quantitative easing in the U.S., can only fuel a demand for South Africa’s most lucrative exports, he added.

South Africa: the Unlikely New Safe Haven?

Katy Barnato
Source: <a href="https://www.cnbc.com/id/49082757">Lonmin a &#8216;Buy&#8217; Despite Mine Violence: Analyst</a>
Lonmin shares are a “buy”, according to John Meyer, head of resources at investment bank Fairfax, despite violence at the company’s South African platinum mines which killed 44 workers.
While some investors have reduced or completely unwound their exposure to the South African natural resources sector as a result of the strife, Lonmin will recover and now is a buying opportunity, he added. (Read More: Investors Offload South African Miners).
“You simply cannot do without South African platinum production,” Meyer told CNBC’s “European Closing Bell” on Monday. “It is so critical: oil refineries need it. Auto catalysts in cars need it… it is essential.” 
Approximately 80 percent of the world’s known platinum reserves are in South Africa.
Speaking on the same program, Patrick Armstrong, director of Armstrong Investment Managers, agreed platinum’s industrial applications make it attractive.
“If you like gold , platinum offers you everything that gold does but it has also got industrial uses&#8230; If you believe reflationwill be forced by bearish central banks, precious metals will be of benefit,” he added. Platinum is the only precious metal he holds at present.
However, Armstrong questioned the merits of Lonmin shares . “Why wouldn’t I just own platinum, rather than a platinum company?” In answer, Meyer forecast that Lonmin will recover from its current difficulties and added that aggressive wage disputeshave bedeviled most South African mining companies.
“It is quite normal to see double digit wage increases in the platinum sector. This is a sector where the workers are highly paid… there are difficult and hard conditions… and these guys can get angry and they want to see the union doing a good job for them,” he said.
Lonmin&#8217;s hefty pay rise offer to striking miners has allowed the conflict to come to an endon Tuesday.
Meyer added that Lonmin was “more than likely” to recapitalize through a rights issue, a view shared by Alison Turner, mining analyst at Panmure Gordon, in an earlier interview with CNBC. (Read More: Lonmin Shares an Excellent Opportunity: Analyst). 
Turner also views Lonmin as an attractive long-term buy.
Other analysts fear that Lonmin&#8217;s travails foresahadow a deteoriation in labor relations across South Africa’s natural resource sectors.“If you are going to have these continued calls for the nationalization of the mining industry, or a revolution of some sort, or any kind of anarchy, it would spell an enormous risk for the global markets because South Africa is one of the largest suppliers of raw materials to the world,”said Robbert Van Batenburg, head of equity research at Louis Capital.
—By CNBC.com’s Katy Barnato

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