The Daily Forex Market Report

Good morning

There are certain tells which let you know that the end of the year is drawing closer.  Of course there are your burnt-out nerves, and there’s also Black Friday which brings its craziness to a shopping mall near you in five days’ time. 

These are the mid rates at 5:50 today:

Market News

• The week ahead is a very short one as far as the Dollar is concerned with no US data releases scheduled for today and then the US market is closed over Thursday for Thanksgiving Day which also makes Friday a non event, but the good news for the Rand is that the Dollar is starting the week off on the back foot.  We open the new week at R18.00 to the Dollar after having closed last Friday at R18.12. 
• Last week saw the Dollar Index climb for the eighth week in a row, only the third time this century that it has managed a run that long, so the Rand will welcome a spot of Dollar weakness this morning with open arms.  Having a quick look at Friday’s price action the index moved up to a fresh two year high of 108.09, this as the disparities between the US and UK/European economic outlooks were highlighted by the release of manufacturing and services PMI data.  The UK’s PMI reading fell into contractionary territory at 49.9, Eurozone PMI fell to a ten-month low of 48.1 but the US report jumped to 55.3 which is its highest level since April 2022.  With economic activity stalling in the UK and Europe bets of deeper interest rate cuts in each region saw the Pound and the Euro fall back while in contrast, the strength of the US economy means the FED doesn’t have to rush things and the Dollar strengthened. 
• Dollar strength looks set to be the order of the day for some time but luckily we are being treated to a bout of Dollar weakness this morning thanks to Donald Trump’s Treasury Secretary pick which he announced late on Friday night.  Trump has removed some pent-up anxiety over arguably his most important cabinet pick by selecting well respected fund manager Scott Bessent, a decision that has resulted in US Treasuries moving lower which in turn is weighing on the Dollar.  With Bessent seen as a cool hand on the US purse strings that is proving to be a calming influence on their bond market, but in recent interviews he has also talked up the importance of a strong Dollar so unfortunately there’s a chance that today’s Dollar weakness could be short lived.   
• The following is from Reuters and talks to this morning’s Dollar pullback:  The Dollar surrendered a little of its recent gains on Monday as investors assumed the pick for US Treasury Secretary would reassure the bond market and pulled yields lower, shaving some of the Dollar’s rate advantage. Yields on 10-year Treasuries slipped to 4.351%, from 4.412% late Friday, as President-elect Donald Trump’s choice of fund manager Scott Bessent was welcomed by the bond market as an old Wall Street hand and a fiscal conservative. “Bessent has publicly lauded Dollar strength following news of Trump’s election win, so I admit to being somewhat perplexed by the suggestion that the weakening in the Dollar is because of his appointment,” said Ray Attrill, head of FX research at NAB. “He is an avowed fiscal hawk, so perhaps that has something to do with it, but seeing is going to be believing in this regard.”
• The US economic calendar might be very short this week with updates only coming tomorrow and on Wednesday, but with these two days delivering the Case-Shiller home price index, US consumer confidence, the latest FED minutes, the Q3 GDP revision, initial jobless claims, durable goods orders and the all important PCE inflation report there is no shortage of headlines to keep the currency market busy.      
• No local market data today.
• Possible USD mid rate trading ranges in the Rand today are R17.90 and R18.20.

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