International factors that have played a contributing to the dollar/rand exchange include massive tax cuts proposed by the Republican Party.
In the last quarter of 2017, the dollar exchange rate moved from R13.53 to R12.46 showing gains of nearly 8%. Since December gold has gone up further by four percent from moving a little over half a percent year on year, presently is priced at $1 339.25 according to the latest SA Bullion Gold Report.
The change in the rand and dollar exchange is largely due to the weakening of the dollar against major currencies in addition to the rand showing strength against all currencies.
The recent rallying of the rand has also been indicative of the response from the outcome of the ANC’s 54th elective conference, says the report.
The SA Bullion Report says that the exchange rate moved from R13.80 to R12.46 to a gain of 10% year on year, this is a low from however R15.26 to R12.46 for a gain of 18.4% two years ago.
International factors that have played a contributing to the dollar/rand exchange include massive tax cuts proposed by the Republican Party that will attribute 80% of the benefits to wealthy individuals and to corporations.
However, Federal Reserve Bank of New York president William Dudley said new tax cuts will provide a short-term boost but leave the economy more vulnerable in the years to come and impact on the dollar.
He said that the tax cuts will weigh on the US creditworthiness and inflate government debt, which will impact negatively on the dollar said President Dudley SA rand bullion statement.
The reduction into the income of the state’s coffers will see an increase of US sovereign debt to grow to $1.5-trillion over 10 years and lift the states debt servicing costs to $300-billion over the same period, says the report.
As a result, the federal reserve might be forced into a policy reversal which would pummel the value of the dollar and spike the price of gold, the report highlighted.