Fake news of President Jacob Zuma stepping down yesterday led to the spike of the South African rand before going down 10 minutes later.
The false reports began shortly before 6:00 a.m New York time. The rand shot up as investors who are not particularly fond of Zuma , looked forward to a new government led by the new African National Congress, Cyril Ramaphosa.
However, the news turned to be mere rumor. Despite Zuma facing pressure from the from within the ANC which is said to remove him from power, perhaps as early as Wednesday, however no concrete move has yet be made.
According to Paul McNamara, London-based fund manager at GAM UK Ltd, “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,”
News-reading algorithmic traders may have been further confused by reports on the wires of a U.S. congressional aide saying that Zuma was lost. But this Zuma wasn’t Jacob – but rather the code name for the seemingly failed mission by Elon Musk’s Space Exploration Technologies Corp. to launch a military satellite. (Musk, coincidentally, was born in South Africa.)
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 rose up and back into positive territory and was up 0.3% to 12.3489 per dollar as of 8:47 a.m in New York.