The Daily Forex Market Report

Good morning

In March 2020 the S&P500 shed $3.3trn in two days as sheer panic around the COVID virus ripped through markets.  That record 2 day selloff was shattered last week as the S&P500 lost almost $6trn over Thursday and Friday, and with equity futures deep in the red this suggests that the selling isn’t don’t yet.   

These are the mid rates at 6:00 today:

Market News

• Sometimes you have to steady yourself in the brace position and just ride out the storm, and we are definitely in the middle of one of those moments right now.  The Rand fell to R19.33 in early trade this morning, our worst level since October 2023, and as things stand the chances of further losses seem likely. 
• Panic is ruling the day across financial markets with shockwaves from Trump’s larger than expected reciprocal tariffs announcement on Wednesday night only intensifying late last week and over the weekend.  A full-blown trade war was always a major worry and these concerns came closer to reality on Friday when China announced a 34% tariff on all US goods, and while they are still open to negotiations with the US this assertive response to Trump’s cumulative 54% tariff on Chinese goods means that the trade war proper has begun.  The prospect of lower global growth, higher inflation and weaker labour markets was all the market needed to heavily sell risk assets and the Rand is under severe pressure as a result. 
• The market was hoping for some positive news over the weekend but unfortunately that hope was misplaced as no rollbacks for any nation have been announced as yet.  US Treasury Secretary Scott Bessent confirmed that more than 50 countries have started negotiations with the US so we might have some good news in the coming days/weeks, but with Donald Trump saying yesterday that he doesn’t like seeing stocks go down but sometimes you have to take your medicine that indicates that concessions are not in our immediate future.  Asian markets are sharply lower this morning with the rest of the world to follow suit as each trading region begins its Monday. 
• The following is from Reuters and suggests that further downside risk is the most likely scenario until we get a change in headlines from the White House:  Investors poured into safe havens like the Yen and Swiss Franc on Monday and heavily sold the risk-sensitive Australian Dollar as the market rout from U.S. President Donald Trump’s sweeping tariffs deepened and fears of a global recession grew. “Things have gone from bad to worse this morning,” said Tony Sycamore, a market analyst at IG. “If there isn’t some sort of walking back of the announcements, then we’re heading for a liquidity event and liquidity will get sucked out of these markets big time across all asset classes.”
• Tariff headlines and recession concerns are driving price movements internationally but the Rand is in an even more precarious position after US congressman Ronny Jackson tabled his US-South Africa Bilateral Relations Review Act of 2025 on Friday.  If adopted the law would trigger a deep review of the bilateral trade between the US and SA while also providing the US with information needed should they want to impose sanctions on some of our politicians given our ties with US enemies in Iran, China and Russia.  This review means our access to the AGOA free trade platform could be in jeopardy, something that would surely be Rand negative. 
• No local market data today.
• Possible USD mid rate trading ranges in the Rand today are R19.10 and R19.40.

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