The UniCredit team have cut their year-end and 2018 forecasts for the Rand following Wednesday's budget but they also highlight that, after an initial bout of short term volatility, the Rand should see a steady improvement throughout 2018.
Falling tax receipts and general revenue underperformance could see the South African budget deficit rise to 4.5% of GDP in 2018, endangering its investment grade status, but the right mix of policies in the forthcoming budget may mean it avoids action from the ratings agencies.
The Pound-to-South African Rand seems to have finished correcting back and now looks poised to advance in the coming, helped by subsiding Brexit fears and what many expect to be a disappointing budget.
There are three candidates and much is at stake in the forthcoming ANC leadership vote. The Rand could either fall sharply or gain by a double-digit number in response to delegates' choice of leader to fight the 2019 election.
The Pound-to-Rand exchange rate's short-term trend higher stalled following a major ruling by the supreme court against President Zuma, and the exchange rate has since started moving lower; now it is expected to continue until it meets a bundle of tough support levels in the 17.40s.