
The Daily Forex Market Report
January 23, 2025
The Daily Forex Market Report
January 27, 2025Good morning
Finally we got some big news from Trump on the tariff front and it wasn’t what the market was expecting. He also fired his first salvo into the central bank/interest rates debate, and the combination of these comments has been great for the Rand.
These are the mid rates at 6:50 today:
USD = R18.41
| AUD = R11.54 |
GBP = R22.84
| DXY = 107.78 |
EUR = R19.26 | Brent Crude = $78.22 per barrel |
Market News
- It looked like yesterday was going to be another boring one in the currency market after we opened at R18.50 to the Dollar and drifted into the mid-R18.50’s for most of the day. But then came two separate developments which put a dent in the Dollar Index and in so doing allowing us to open this morning at R18.41.
- As mentioned, the two catalysts driving price action in the currency market yesterday were unrelated other than the fact that they both came from Donald Trump. First came his video link presentation at the World Economic Forum in Davos, Switzerland, where he caught the market’s attention by saying “I’ll demand that interest rates drop immediately.” It’s a widely known fact that he wants to have an influence on the FED, and yesterday he suggested that he understands monetary policy better than those who are setting it, but while the FED prides itself on their political independence any suggestion that Trump would be able to bring about lower rates was bad news for the Dollar.
- Trump trying to wade into central bank matters was a major headline but he wasn’t done there, this as an interview with Fox News saw him suggest he’d rather do a trade deal with China and not impose his much talked about tariffs. There’s plenty going on in the new Trump administration but the financial market has been fixated on tariffs, or the lack of them to be precise, and with Trump admitting that a deal with the world’s second largest economy is his preferred route that eased even more of the built up fear which had inflated the Dollar over recent weeks. The Dollar Index is well on track to post a losing week and the Rand is benefiting nicely as a result.
- The following is from Reuters and while it talks about further potential relief for the Aussie and Kiwi Dollars you can throw the Rand into the same basket as an emerging market currency linked to trade with China: The Australian and New Zealand Dollars were riding high from Trump’s interview with Fox News aired on Thursday evening, where he said he would rather not have to use tariffs over China. “It’s still early days, although it looks like he prefers to negotiate with China first and perhaps come to a deal, rather than to use tariffs,” said Sim Moh Siong, a currency strategist at Bank of Singapore. “If he goes down the route of holding back on tariffs but instead coming to a deal with China, then you could see more relief coming through in terms of the Asian currencies as well as the Aussie and the Kiwi.”
- The first week of Trump’s second term is coming to an end and if there is anything that we have learned it’s that, for now at least, he seems to be taking a significantly more measured approach when it comes to tariffs and trade. Of course this could change in an instant, but with his campaign threats of widespread tariffs not materialising thus far that has taken a lot of steam out of the Dollar with the Rand now some distance below the R19.23 that we hit on the 13th of January. Long may this trend continue!!!
- No local market data today.
- Possible USD mid rate trading ranges in the Rand today are R18.30 and R18.60.
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