The Daily Forex Market Report

Good morning

Here’s wishing the Baby Boks good luck as they take on New Zealand in tomorrow’s U20 World Cup Final.  South African rugby is in a rude state of health at the moment and adding yet another winner’s trophy to the collection would be a thing of beauty!!!

These are the mid rates at 6:45 today:

Market News

• The week gone by has had its ups and downs for the Rand, but the good news is that we’ve managed to keep it below R18.00 to the Dollar so far. Hopefully, this trend continues through the final trading session of the week. We go into today at R17.82, which should give us a decent buffer to work with.

  Keeping things below R18.00 has been a notable achievement, especially considering that the Dollar Index looks set to post its second consecutive weekly gain. This comes as robust US market data continues to highlight the strength of the US economy, easing any pressure on the Federal Reserve to step in with interest rate cuts. Yesterday saw a combination of a better-than-expected retail sales report and fewer initial jobless claims—both of which confirm that the US economic and labour markets remain on solid footing, despite ongoing speculation about a looming recession.

  The following, from Reuters, reminds us once again that predictions of a crumbling US economy may be premature:
  Equities advanced on Thursday, with the S&P 500 and the Nasdaq registering record closing highs, and the Dollar rose as investors were encouraged by the latest batch of economic data and earnings reports. “In economic data, two key releases came out today: retail sales and jobless claims. Both were better than anticipated,” said Mike Cornacchioli, investment strategy director and senior vice president at Citizens Private Wealth. “Those two illustrate the strength of the consumer and the labour market. So, a lot of the fears that were placed on the state of the US economy are overblown and have failed to come to fruition at this point. Maybe they will sometime down the line, but this data—and the data that’s come in lately—has just reinforced the strength of the US economy.”

  That said, the week wasn’t without some drama for the Dollar. On Wednesday, the greenback took a direct hit, allowing the Rand to strengthen from R17.95 to R17.78 in an instant, before gradually giving up those gains as the Dollar recovered. Bloomberg reported that Donald Trump was likely to fire FED Chair Jerome Powell and had floated the idea with various Republican lawmakers. The report instantly sent the Dollar lower on speculation that any replacement would usher in a series of interest rate cuts. However, Trump quickly denied any such intentions, which cooled speculation and helped the Dollar regain lost ground.

  The Dollar Index is currently not far from its weekly high, so one might expect the Rand to be closer to its worst level of R17.96. However, we’re holding at R17.82. This may be partly due to South Africa hosting the G20 Finance Ministers and Central Bankers meeting this week. UK Finance Minister Rachel Reeves announced an infrastructure partnership that would see UK expertise help kickstart various projects across the country. The prospect of increased economic activity and job creation could be helping the Rand offset some of the Dollar’s current strength.

  There is no local market data due today.

  Possible USD mid-rate trading range for the Rand today: R17.70 – R18.00.

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