Welcome to another issue of our Weekly Rand Review.
This week, the Rand experienced a mix of turbulence and resilience, driven by a series of local and global economic events, which saw the currency dip and recover, closing the week on a strong note - its best levels since January last year!.
Meanwhile, global markets saw some notable milestones with stocks reaching new highs and Bitcoin surging past $65K.
Let’s break down what happened, how it impacted the Rand, and what you should be watching in the coming days.
Key Moments (23 - 27 Sep 2024)
Some of the more pertinent headlines and events over the past week:
Inflation Eases Locally: South Africa's Produce Price Inflation (PPI) eased to 2.8% YoY
US Mixed Signals: Durable Goods Orders were flat, while GDP managed to improve QoQ
Equity & Crypto Markets: US and local stock markets hit new highs, and as crypto market seem to be waking up as Bitcoin surges
The Rand had a bit of a shaky start to the week, opening at R17.36/$ and then losing 11 cents against the Dollar in morning trade...
...but with little data to drive the market, the Rand managed to not only recover, but test below R17.30 before closing the day out around R17.33/$.
Tuesday saw the Rand continue its run as it tested R18.25 and the bounced in a 10c range before managing to close at R17.25/$, reflecting cautious optimism even in the absence of major economic catalysts.
Wednesday brought a lot more volatility, as the Rand opened at R17.25/$, but lost value from the get-go, as the Dollar pushed the market back up to the R19.36 mark.
Once again, the Rand managed to reverse things, plus some, as it strengthened to new weekly lows around 17.13 to the Dollar, before being pushed back some15 cents...
...but the Rand wasn't going to give up that easily as it managed to make another daily close lower at R17.20...
...its 10th consecutive daily gain!
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In other news:
World leaders met this past week to vote for three new international agreements under the UN, which included all sorts of vague socialistic jargon, but which are merely another step towards their objective of global governance, regulation and control, ominously giving more control to the UN in the event of 'global shock' events, and more...
...interesting that they are trying to rush these through before the US elections, given Trump's disdain for the UN and its globalist agenda in the past.
Stock markets in the US and South Africa hit new highs this week, as investor took on yet more risk...inflating the bubble even more. Meanwhile, Bitcoin pushed back above $65000 for the first time since July this year, with a test above $70k on the cards in the next couple of months.
To add to the week's events, Hurricane Helene ripped up the middle of the US, wreaking havoc with major flooding and damage to areas not usually impacted by these tropical storms
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The Rand opened at R17.20/$ on Thursday but faced early pressure, slipping to R17.32/$.
However, positive PPI data locally and mixed signals out of the US later in the day seemed to provide a trigger for a Dollar sell-off with Durable Goods Orders showing no growth, while GDP improved this past quarter to 3% Q-on-Q.
The Rand took advantage and drove the market all the way back to close near the low of the day at R17.15/$
Friday saw the Rand continuing its trend, but it wasn't all one way traffic.
The currency opened at R17.15/$ and, bolstered by South Africa's stronger-than-expected GDP figures, strengthened to a low of R17.07/$, before closing out the week around the R17.10 mark to round off another impressive performance.
Weekly Wrap-Up & Risk Analysis
This week was actually slightly less volatile than last week, but still enough to make an impact on your exposures::
Average Daily Range: The average daily fluctuation for the USD/ZAR exchange rate last week was 16.0c or approximately 0.92%.
Weekly Range: The total fluctuation from the highest point to the lowest point was 37c or 2.1%.
What does this mean for you?
For every R1 million exposure, the potential profit or loss could have been around R16,000 on any given day and as much as R37,000 over the week...
...highlighting the importance of having a dynamic forex strategy for timing your hedging and conversions to both:
Mitigate potential losses and
Take advantage of favorable market movements.
Hence the importance of having a roadmap that can help you make the right decision
at the right time - at a fraction of the cost of your risk!
The Week Ahead (30 Sep - 3 Oct 2024)
The Rand has been on the warpath the past few weeks, but as you know, the market do not move in different degrees of trends, waves or cycles, and so we need to be on the lookout for when the tide will change...
...and once again, we will be looking to our forecasting model to give us some insights - and we recommend you do too!
There are some potential triggers this week, from an economic releases point of view, with trade balance and Manufacturing PMI locally, Eurozone inflation rate - and then of course, US non-farm payrolls.
And then, of course, you have geopolitical tensions not easing in the Middle East and Europe, with Israel having taken our Hezbollah's ling-time leader over the weekend, and more warnings from Putin to NATO's nuclear nations direct support of Ukraine.
And then, expect some October surprises ahead of the US elections, which could also provide some market jitters...
So plenty gong on to keep the markets on their toes!
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Thank you for being a subscriber to our Weekly Rand Reviews - we would welcome your comments, questions and feedback.
Until next week...
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This weekly newsletter is brought to you courtesy of Dynamic Outcomes, a Rand forecasting service focused on assisting exporters, importers and individuals in making more informed and educated decision around the timing of their foreign currency transaction – a critical factor in any risk management strategy. This is centred around providing an objective view of where the Rand is expected to move against the Dollar, Euro and Pound over the short, medium and long term.
BeztForex have arranged for our clients to try out the Dynamic Outcomes Rand forecasting service for a full 14 days at no cost and no obligations:
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Disclaimer: The content of this Weekly Rand Review has been prepared by and constitutes the opinion of Dynamic Outcomes, a division of Dynamic Forex Solutions LLC (DFS); it is solely for informational and educational purposes and is not to be taken as advice, or an offer or solicitation to buy or sell the securities or financial products mentioned in the content nor a recommendation to participate in any particular trading strategy. No past performances of any strategy or forecasts are a guarantee of future performance; trading in financial markets involves substantial risk, and you need to do your own due diligence in managing this risk. While every care has been taken in ensuring that the content gleaned from third parties is from reliable sources, no responsibility or liability will be accepted by BeztForex or DFS as to the accuracy of the information contained here, which may be subject to correction or amendment at any time after publication.
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