The Daily Forex Market Report

Good morning

It just goes to show that the best time to have an unprecedented local scandal, like postponing the annual Budget Speech for the first time in our democratic history for example, is to do it when the Dollar is on the back foot!!!

These are the mid rates at 7:00 today:

Market News

• Headlines still abound covering the budget postponement and what we might be in for come the new date on the 12^th of March, but as far as the Rand is concerned it’s as if nothing even happened.  We were at R18.33 to the Dollar before the budget bombshell dropped which sent the Rand tumbling to R18.55, but a very welcomed bout of Dollar weakness sent us back to R18.33 yesterday afternoon.
• With the conveyor belt of tariff threats coming out of Washington since Trump’s inauguration (only) a month ago it probably comes as a surprise to find out the that Dollar Index is on track to register a third consecutive week of losses!!!  Volatility has been the name of the game with the market reacting negatively, and with outsized moves, when the first tariff announcements were made only for those losses to be regained when said tariffs were postponed, and as time has progressed the market’s reaction has become less and less pronounced.  Dollar long positions had built up to a 9 year high prior to Trump taking office but with only a 10% tariff on China actually being implemented thus far those longs are being unwound and the Dollar Index is on the slide. 
• The following is from Reuters and talks to the market becoming desensitised to tariff headlines:  The Dollar dropped against major currencies on Thursday as investors took a step back and assessed President Donald Trump’s latest tariff plans. “The market has reached tariff-fatigue where it’s just not reacting as it did right after the election in November, December and even in January,” said Paresh Upadhyaya, director of fixed income and currency strategy, at Amundi US in Boston. “It’s now operating using the government shutdown playbook, where everyone thinks they have seen this dog-and-pony show before and expects the same thing. There is the threat of tariffs, leading to negotiations and a reprieve and some form of resolution.”
• Also weighing on the Dollar is falling US Treasury yields as a combination of higher than expected weekly jobless claims (good for lower FED rates) plus comments from Treasury Secretary Scott Bessent that he has no plans to increase the supply of long dated US Treasuries put downward pressure on yields.  The Dollar typically moves in lockstep with Treasure yields and so lower yields was bad news for the Dollar yesterday.    
• Not much else to report as there have been no major developments in the US / Russia / Ukraine peace talks while the week has not presented any top tier US data releases.  Next week has two major events to look forward to however, those being the Nvidia quarterly earnings report on Wednesday which will have investors around the world watching with bated breath while on Friday we get the FED’s preferred US inflation gauge, the PCE index. 
• No local market data today.
• Possible USD mid rate trading ranges in the Rand today are R18.25 and R18.55.

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