Daily Forex Market Report

Good morning

As we approach Wednesday the 27th, and with it the 2 month marker for life in lockdown, we finally have a concrete understanding of when restrictions will ease. Sitting at home for weeks on end has definitely become a way of life so it will be interesting to see how we come out from our hibernation from next Monday onwards.

These are the mid rates as at 8:00 today:

USD = 17.54
AUD = 11.46
GBP = 21.38
NZD = 10.70
EUR = 19.12
Brent Crude = $34.54 per barrel


Market News

  • The Rand has already danced a little jig this morning as we moved from R17.65 to the Dollar to R17.54 in early trade. Expectations are for muted Rand movements today given that the US and UK markets are closed for a public holiday, but with our economy due to open up from next week we could see the Rand move stronger over the week ahead.
  • While not wanting to wade into a political debate Cyril Ramaphosa appears to have seized back control in our coronavirus action plan. The past few weeks have seen speculation rise of a rogue National Command Council where a small group of ministers appeared to be making questionable decisions behind closed doors, and headlines on Friday of Nkosazana Dlamini-Zuma pushing for the ban on alcohol and cigarettes till Level 1 only added fuel to the flames. But last night Ramaphosa confirmed our most aggressive market opening yet with all mining, manufacturing, construction, wholesale and a retail sectors to fully open next Monday while restaurants can provide food delivery or collection services. Alcohol will be legal for offsite consumption and the this along with all other measures mentioned will go a long way to saving jobs, and will hopefully support the Rand this week.
  • While Ramaphosa’s speech was welcomed countrywide he was at pains to remind us that with the easing of movement restrictions comes the increased chance of a spike in infections. The following is from the president: “As individuals, as families, as communities, it is you who will determine whether we experience the devastation that so many other countries have suffered, or whether we can spare our people, our society and our economy from the worst effects of this pandemic.”
  • The Rand might enjoy a relatively calm day today with the US and UK markets offline but there could be choppy waters ahead as tensions between the US and China continue to escalate. The war of words over China clamping down on Hong Kong ramped up this weekend with US Secretary of State Mike Pompeo saying that the US would in all likelihood impose fresh sanctions on China should they push ahead with their plans. Predictably China has responded saying that the US risks pushing the world to the brink of a new cold war if they don’t stop trying to change Chinese policy, and this new layer of tension will hurt risk assets like the Rand.
  • The following is from Reuters: The Dollar edged higher against most Asian units on Monday as worries about a standoff between the United States and China over civil liberties in Hong Kong fuelled demand for safe-haven currencies. “The biggest concern is the tension between the United States and China,” said Takuya Kanda, general manager of research at Gaitame.com Research Institute in Tokyo. “Things were already bad, and it is likely to get worse because of the Hong Kong security law. This supports risk-off trades, which is positive for the Dollar.”
  • No local market data today.
  • Possible USD mid rate trading ranges in the Rand today are R17.35 and R17.75

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