
The Daily Forex Market Report
January 22, 2025
The Daily Forex Market Report
January 24, 2025Good morning
Heightened volatility in the currency market under the new Trump administration is what we were bracing for and heightened volatility is what we got, but only for one day and it has pretty much been sideways movement since. I certainly wasn’t expecting to be scratching for things to report on this week, but maybe that’s a good thing.
These are the mid rates at 5:30 today:
USD = R18.50
|
AUD = R11.61 |
GBP = R22.79
|
DXY = 108.28 |
EUR = R19.26 |
Brent Crude = $78.78 per barrel |
Market News
- Very little to talk about from yesterday’s trade as we opened the day at R18.50 to the Dollar and despite brief moves to R18.56 and then R18.45 we closed back at R18.50, and that’s exactly where we open again today.
- The situation in the currency market seems to be a simple one at present, that being a complete lack of conviction until we get some concrete news from Donald Trump on his much talked about tariff policies. The fact that no tariff announcements were forthcoming on Monday, his first day back in office, was enough to see the Dollar Index plunge by its biggest daily margin since November 2023, and the Rand notched up decent gains as a result, but very little has happened since, and we remain in “wait and see” mode.
- It’s not that there has been a total void in tariff talk as Trump has alluded to hitting Canada and Mexico with a 25% tariff on the 1st of February, a 10% tariff on China around the same date and he also suggested that Europe are on his radar, but with these just being off the cuff remarks rather than signed executive orders the market is taking them with a pinch of salt (rightly or wrongly). What is more definitive is that Trump has ordered federal agencies to complete a broad review of trade issues by the 1st of April so maybe that is the date that the market will start to focus on, but for now no news is good news for the Rand as we hold on to recent gains.
- The following is from CNBC and talks to the currency market’s inactivity while cautioning against getting too comfortable: The Dollar steadied against major peers on Thursday, continuing its near paralysis of the past two days before more concrete announcements on tariffs from US President Donald Trump. “President Trump has so far taken a less hostile-than-expected approach to China,” amid overall “softer-than-expected policies and tone on tariffs”, said Carol Kong, a currency strategist at Commonwealth Bank of Australia. At the same time, “we are cautious (that) risk sentiment remains fragile and can quickly turn sour if President Trump strikes a more aggressive tone.”
- On the local front our CPI reading came in cooler than expected yesterday at 3.0% which all but guarantees that we will see another interest rate cut next Thursday. The following is from Business Day: Consumer inflation accelerated slightly to an annual rate of 3% in December from 2.9% a month earlier, reinforcing expectations of a 25 basis point interest rate cut at the Reserve Bank’s monetary policy committee (MPC) meeting next week. “With CPI well below the midpoint of the inflation target of 4.5% year on year, and likely to remain so for the rest of this year and most of the first half of next year, the MPC is still expected to trim interest rates this month, by 25 basis points,” said Investec chief economist Annabel Bishop.
- No local market data today.
- Possible USD mid rate trading ranges in the Rand today are R18.35 and R18.65.
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