The Daily Forex Market Report

Good morning

The market hates uncertainty and at present we have uncertainty by the bucketload as details ahead of Trump’s Liberation Day policies remain scarce.  The 2^nd of April has arrived however, and the wait is almost over, although Trump’s announcement is scheduled for 10pm our time so most of us will only know what’s happened when we wake up tomorrow!!!

These are the mid rates at 7:05 today:

Market News

• The Rand is finding it tough going as we head into probably the biggest day for financial markets this year, although some of that pain is probably self-inflicted.  We opened the day at R18.30 to the Dollar and fell to R18.51 by the evening session while also losing ground against other currencies. 
• Trump’s tariff announcement will dominate financial news outlets today but on the local front the Rand could be feeling some pressure thanks to the political drama that is centred on the 2025 Budget.  Not wanting to wade too deep into the murky waters of political brinkmanship but the DA plus other parties in the GNU are against the ANC’s cumulative 1% VAT hike while also pushing for changes in other non-budget related areas, but it would appear that the ANC has found support from ActionSA, a non-GNU party, and the budget could get voted in today regardless of the DA’s objections.  What this means for the GNU going forward is unclear, but any political uncertainty is probably bad news for the Rand. 
• Uncertainty on the local front is joined by heaps of uncertainty internationally as the world waits with bated breath for Trump’s Liberation Day announcement.  Details leading up to the event are almost non-existent, leading analysts at Deutsche Bank to question whether the White House even has a final plan ready yet, but what we do know is that whatever Trump announces will be effective immediately while there is some corridor talk of a blanked 20% tariff on all countries, although this level is unconfirmed. 
• As the clock ticks down to the big announcement it can be assumed that we won’t see much activity in the currency market with investors not wanting to be caught on the wrong side of the trade.  The Dollar Index drifted sideways for most of yesterday and the following from Reuters underlines how the market is now in “wait and see” mode:  “Market nerves are badly frayed ahead of Trump’s ‘Liberation Day’ tariff announcement. With deeply-contradictory narratives emerging around the scope, scale, and duration of the administration’s proposed trade measures, investors are trimming risk across the currency markets and waiting for the details to emerge,” said Karl Schamotta, chief market strategist, at Corpay.
• In the absence of any concrete details speculation around what lies in store for the next few days is rife with some analysts suggesting that market negativity is overdone, and that the actual announcement will come as a relief when compared to everyone’s worst case scenario planning, while others suggest that rather than bringing certainty today will simply be another round in tit-for-tat retaliatory tariffs between countries.  The Rand is hoping that risk-off sentiment isn’t amplified tonight, by this time tomorrow we’ll know more… 
• No local market data today but yesterday our manufacturing PMI for March as well as our new vehicle sales report came in much stronger than forecast which was a pleasant surprise. 
• Possible USD mid rate trading ranges in the Rand today are R18.40 and R18.70.

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