The Daily Forex Market Report

Good morning

Panic selling during times of heightened volatility is a tempting trap, and many investors would have done exactly that when Middle East headlines were dire.  But sentiment can change in an instant and those who held their nerve have now enjoyed a 13 day winning streak for the Nasdaq index, it’s longest up run since 1992!!!

These are the mid rates at 5:50 today:

Market News

• Friday was a great day for risk assets but unfortunately it looks like that Nasdaq winning streak will come to an end today, and that’s also bad news for the Rand.  Friday’s developments saw Brent Crude plunge to $86/barrel while the Rand set a new best level since the war began as we made it to R16.15 to the Dollar, but headlines have taken a turn for the worse over the weekend and we go into the new week at R16.38. 
• Taking a quick look at Friday’s price action we got a glimpse of how the Rand could react when the Iran war is finally over, this as we powered to R16.15 after Iran announced that the Strait of Hormuz will be fully opened to all commercial shipping for the rest of the two week ceasefire (which ends tomorrow).  At the same time Donald Trump said that the US will assist Iran in recovering all of their enriched uranium and relocate it back to the US, and these headlines were enough to send US stocks soaring to fresh record highs while the Rand posted impressive gains. 
• Unfortunately for the Rand Friday is a long time ago now and the weekend has seen tensions escalate once again, this as the US blockade of the strait is not over and as such US naval forces shot at, disabled and then seized control of an Iranian ship that was trying to exit the strait.  As you would expect this has not gone down well with Iran who have now declared their blocking of the strait back on, and the resultant uncertainty of just where we are on the road towards a peaceful resolution means that risk assets are under pressure this morning. 
• The following is from Reuters and talks to passage through the Strait of Hormuz remaining the market’s focal point:  The US Dollar firmed to its highest level in ​a week against major currencies on Monday as renewed US-Iran tensions and shaky prospects of a peace deal in the Middle ‌East sent investors toward safe havens. “The key is still the Strait of Hormuz for many, and hopes that we could see the US ​and Iran sit down at the negotiating table before the ceasefire ends now seem remote,” said Nick Twidale, ​chief market strategist ⁠at ATFX Global in Sydney.  “For now, I think we will see further downside moves for risk in the coming sessions.”
• We’ve seen how fresh headlines can move the market, unfortunately to the downside this morning, but there is a chance that we could get some positive updates in the very near future.  The US negotiating team is headed back to Pakistan today and while Iranian news outlets are claiming that no peace talks are planned on their side one would assume that the Americans aren’t simply hoping that their Iranian counterparts will turn up.  The Rand would benefit if talks do actually take place, and we should know more later today or tomorrow. 
• No local market data today.
• Possible USD mid rate trading ranges in the Rand today are R16.25 and R16.55.

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