The SAVI Dollar (South African Volatility Index) is a forecast of the 90 day implied volatility of the rand against the dollar. The SAVI Dollar enables investors to gauge “fear” and market sentiment relating to the local currency market. For example, when daily currency market returns are sufficiently volatile, the SAVI Dollar will tend to spike upward, reflecting a sense of fear and a higher level of expected risk. In a high volatility environment, large market moves are possible – up or down. When volatility is low there is a measure of complacency in the markets, or a lack of fear.
Who should use this?
Market commentators, economists, traders and investors use the SAVI Dollar to determine market sentiment in the currency market.
- Can be used as a tool to measure market sentiment in the South African currency market.
- Can be used to monitor the fear forecast on a daily basis.
- Can help to estimate how far prices are expected to move in a given time frame.
- While the SAVI Dollar forecasts the volatility of the rand against the dollar, currency markets are influenced by politics and world events and volatility may fluctuate accordingly.
How to get SAVI Dollar
The SAVI Dollar is published at the end of each trading day.