47% probability of the rand crashing in next 12 months - Rand Merchant Bank

Four from four. Each of the last four Fed cutting cycles has seen the rand blow out…

John Cairns, Strategist - Rand Merchant Bank

The South African rand lost 30% of its value within 12 months after the start of each of the last four US rate-cutting cycles and 40% of its value within 15 months.

Each time the Fed has cut rates, the US economy has slowed sharply. Each time the US has slowed sharply, the rand has blown out…

John Cairns, Strategist - Rand Merchant Bank

The Money Show’s Bruce Whitfield interviewed John Cairns, a Strategist at Rand Merchant Bank.

Listen to the interview in the audio below (and scroll down for quotes from it).

Fed cuts by itself are positive for the rand… That’s why it’s gone from R15 to the dollar to under R14 to the dollar… However, three to 12 months after the Fed cuts, we experience weakness in the US economy… and significant rand weakness…

John Cairns, Strategist - Rand Merchant Bank

The Fed cutting signals something is going wrong in the US economy…

John Cairns, Strategist - Rand Merchant Bank

…R18, R19 even R20 to the dollar if history repeats itself… Take this risk seriously…

John Cairns, Strategist - Rand Merchant Bank

It didn’t matter what our fundamentals were… global themes are so strong; it doesn’t matter what happens here…

John Cairns, Strategist - Rand Merchant Bank

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This article first appeared on 702 : 47% probability of the rand crashing in next 12 months - Rand Merchant Bank


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