Welcome to your strategic view of the Rand's navigation through another dynamic week!
From Trump's tariff threats to positive trade data, while US GDP surprised to the upside, this week's currency markets delivered some opportunities amid heightened volatility.
The Rand demonstrated remarkable adaptability though, testing both support and resistance levels while responding to evolving market narratives.
Let's dive in and decode the week's key movements...
Key Moments (25-29 Nov 2024):
Some of the more critical factors affecting price action this week:
- Trade Dynamics: Trump tariff threats spark EM selloff
- Local Resilience: PPI drops to 14+ year low, trade surplus hits 3 month best
- Growth Signals: US Q3 GDP comes in at 2.8%
- Strategic Shift: SA assumes the G20 presidency
Monday: A Choppy Start
Opening the week at R18.02/$, the market had a choppy day as it tested higher to hit R18.11/$ before settling back down to close the day pretty much where it had started.
With not much in the way of economic news, the markets looked ahead to US GDP data, the Fed's statements and local Trade Figures later in the week...
...and then, of course, all eyes were on the implications for the markets and geopolitical landscape, especially on looming trade tariff announcements, which he had promised during his campaign.
Tuesday: Trump Tariff Tremors 💫
And then the fun began!
Opening at R18.02/$, markets were caught off guard by Trump's announcement of potential new tariffs on major trading partners, with China, Canada and Mexico getting special mention...
...he certainly isn't waiting until January to start shaking things up!
Markets reacted, and the Rand took an immediate hit, spiking to R18.22/$ before pulling back. But that wasn't the end - by late afternoon we'd pushed back above R18.20 as emerging markets.
But somehow the Rand managed to claw back some ground, closing at R18.17/$ after release of FOMC minutes showed they were still cautious about inflation, despite the recent improvements.
Wednesday: US GDP Resilient But...
As we hit mid-week, the Rand opened steadier at R18.15/$, with markets were focused on the recent release of FOMC minutes overnight as well as GDP data and Durable Goods Orders giving some hints on where the economy was headed...
...which when it came, was a mixed bag, with Q3 GDP coming in at 2.8% compared with the previous quarter's 3%, while Durable Goods Orders squeaking in at just 0.2% in October, falling short of the 0.5% forecasted growth.
Once again it was a choppy session, with the market testing 18.07 on the lower side, jumping higher to hit R18.23/$...
...before settling back to close around where we started.
And then, in other news:
Middle East Breakthrough 🕊️
In a significant development for global stability, Israel and Hezbollah reached a historic ceasefire agreement, mediated by international actors. This breakthrough (if it holds!) could ease regional tensions and potentially stabilize oil markets, a key factor for emerging market currencies.
SA Takes G20 Helm 🌍
South Africa's assumption of the G20 presidency marks a pivotal moment for the nation's global influence. Focusing on inclusive economic growth and climate change, this leadership role could enhance investor confidence in South African markets.
Bitcoin's Bull Run 📈
Cryptocurrency markets continue their remarkable ascent, with Bitcoin approaching $100,000. This surge reflects growing institutional adoption and could signal a broader shift in global financial markets, particularly following Trump's crypto-friendly stance.
Did you see our email and post about how we predicted this when price was back down below $16,000 - you can see it here
Want to see where Bitcoin, the Dollar, Euro and Gold are headed now?
Get our latest predictions here - 7 day free trial
Thursday: Holiday Surprises 🎯
With US markets closed for Thanksgiving, we might have expected a quiet session.
Instead, the Rand showed its hand...
Opening at R18.16/$, we saw an early push higher to R18.26/$ as Asian markets digested Trump's trade stance, but local factors soon took control, with the news that Producer Price Inflation (PPI) has fallen by 0.7% YoY, compared with 1% the prior month...
...the first negative PPI figure since March 2010!
A very encouraging sign for consumers...
...and the market seemed to take heart, as the Rand reversed sharply, pushing all the way back down to close out the day at R18.07/$.
Sometimes the quietest days pack the biggest surprises.
Friday: Trade Triumph ⭐
And then we were into Friday, and it ended with a flourish!
Opening at R18.07/$, the markets seemed to embrace the positive trade data showing a surplus of R14.6 billion in October - the widest trade surplus in three months, as exports surged 5.3% over a month to a near one-year high of R179.6 billion
The Rand found steady support, touching R18.00/$ as traders reassessed local fundamentals and digested the week's happening
Despite some late profit-taking, we closed out at R18.04/$, a fitting end to a week where local strength eventually outweighed global headwinds.
And that was the wrap!
Volatility & Risk Analysis
Again, a less volatile week, despite all the goings on!
- The Average Daily Range was 16c or 0.9% - which still equates to a potential profit or loss of R9,000 every day for every R1 million exposure
- The Weekly Range (total fluctuation) from the highest point (R18.26/$) to the lowest (R17.92/$) was 34c or 1.9%. This means by taking action at the right time you could have saved or lost R19,000 for every R1 million exposure...
In order to manage this risk, you need to:
a) Understand how the markets work, and
b) Have an objective system for timing your hedging and conversions to enable you to:
See below for more....
Want to understand how the market actually works
- and how to use this to advantage?
Download your
"Unpuzzling the Rand eBook" HERE =>
The Week Ahead
And just like that, we are into December - where has the year gone?
This week we don't have a lot of big-movers have some data releases of interest, with the biggie of Non-Farm Payrolls likely to be the big mover for the week:
- SA: Manufacturing PMI, GDP, Current Account
- US: Manufacturing PMI, Fed Chair Speech, Non-Farm Payrolls
And then, of course, continued reaction to Trump's trade stance internationally as well as all eyes being on Ukraine with news coming through that Ukraine may be ready for peace talks.
Stay sharp, stay informed, and may your trades be ever in your favor!
Until next week!
To give you a little helping hand, feel free to take our Rand forecasting service for a test-drive!
This will give you access to the same charts we are to give us and our clients the likely direction of the Rand - ahead of time, enabling you to make educated and informed decision.
Simply use the link below to get access now.
This will give you access to the same charts we are to give us and our clients the likely direction of the Rand - ahead of time, enabling you to make educated and informed decision.
No charge. No card. All yours to trial for 14 days.
If you have any questions or feedback, please leave them below.
To your success~
James Paynter
P.S. Worrying about how to in manage your Rand exposures this year? Email me or give me a call on (041) 373-6310 or (087) 551 2848 - we would love to help.
P.S. Enjoyed this Weekly Rand Review? Click here to get our Weekly Rand Rev
