And welcome to another chapter in the Weekly Rand Review memoirs!

What a week of surprises and sharp moves for the Rand! From inflation beats to BRICS summits, and political spats to market stats, our currency has given us enough action to fill a month of trading.

The Rand swung from strength to sudden weakness faster than you could say "valued ally" - and that's just the half of it.

This week brought us a mix of encouraging data and political curve balls that had traders scratching their heads. While inflation numbers gave us a pleasant surprise, President Ramaphosa's embrace of Putin in Kazan sent markets into a spin...

...throw in some BRICS expansion plans and local political tensions, and you've got yourself a week that kept everyone guessing.

So, pour yourself a cuppa, get comfortable, and let's unpack what's been moving our money...

Key Moments (21- 25 Oct 2024):

Some of the more pertinent headlines and events over the past week:

• Inflation Cools: Latest CPI drops to better-than-expected levels
• BRICS Summit Drama: Putin announces 13 new potential partners along with de-dollarization plan

GNU tensions flare over Ramaphosa's Russia stances

Monday: Starting with a Shiver

The Rand opened the week at R17.57 against the greenback, with markets already jittery about the week's heavy data calendar and the looming BRICS summit.

Throughout the morning, we saw tight trading ranges, with the USDZAR pair hovering between 17.54 and 17.58.

But as the day wore on, nerves started showing...

...by mid-afternoon, we'd pushed up to R17.65/$, and while we managed to claw back some ground to close at R17.57/$, our analysis was suggesting this was just the start.

Our latest forecast was indicating a move up into the R17.86-18.10 target area - and with the week's political and economic calendar ahead, this was looking increasingly likely...

(enlarge here)

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It was going to be an interesting week if this played out.
Tuesday: Finding Some Brief Relief

Opening at R17.57/$, the morning brought our first significant data point - that disappointing Leading Business Cycle Indicator showing a 0.7% decline...

...but oft times bad news doesn't mean the market will move in that direction - and this time was no different!

The Rand found its feet, pushing down to R17.49/$ - our best levels of the week - before closing at R17.51/$, with the market clearly positioning itself ahead of Wednesday's inflation numbers

A welcome respite, though we weren't expecting it too last too long (as we kept our eyes firmly on what the forecast was telling us.

Wednesday: Summit Storm Hits Hard

Opening at R17.50/$, the morning started bright, especially with the inflation surprise - 3.8% versus a forecast of 4.1%.

Initially positive stuff...

But then the BRICS summit grabbed the headlines, and boy did it grab them hard, with the Rand taking an absolute hammering...

...and Saffers watched in disbelief as the USDZAR rocketed to R17.86/$ - our weakest point of the week and a single day 37c drop, before closing out at R17.74/$

...didn't someone somewhere predict a move above R17.86? 😀

We trust that you weren't caught by this move...if so, we need to talk

BRICS Summit Drives Wedge in GNU

To cover the big news Item of the week in more detail:
• The BRICS Summit in Kazan saw Putin announce plans for 13 new "partner" countries, celebrating the attendance of 35 nations as proof that Western isolation efforts had failed.

  The expansion plans include countries like Turkey, Algeria, and Belarus, though names will only be officially announced once accepted.

  Tensions flared when President Ramaphosa greeted Putin as "a valued ally," prompting immediate criticism from GNU partner DA's Steenhuisen, who warned this could jeopardize international trade relations, particularly with the US.

  The rift deepened as Ramaphosa's office hit back, stating the president wouldn't be "micro-managed" on foreign policy by the DA, highlighting growing strains within the GNU coalition over South Africa's international alignments.

  This rift does not come as a surprise at all to us, and is a wake-up call for those that thought the GNU was a step in the right direction, and that somehow the DA would steer the ANC away from its communistic ideals and agenda.

  All they have done is lure the opposition into their camp with big promises and lavish dinners without any intentions of changing course whatever on their NDR agenda...

  ...and now made much easier after having effectively swallowed up all the opposition parties...

  ...which reminds me, does anyone remember what happened to 'Kortbroek' van Schalkwyk and the NNP?

Thursday: Finding its Feet

If Wednesday was the storm, Thursday brought some calmer waters.

Opening at R17.76/$, the Rand found its footing as markets digested both the inflation data and summit fallout. The DA's criticism of Ramaphosa's Putin comments added another layer to consider, but traders seemed to take it in stride.

A steady decline through the day saw us touch R17.64/$ before closing at R17.65/$ - a much-needed recovery.

Friday: Consolidation Rules

And then it was Friday, with the week closed with markets in a more reflective mood.

Opening at R17.65/$, it seems the market had got over the BRICS news and the market managed to push lower to hit R17.65/$ by the time the US Durable Goods release came in with a worse-than-expected 0.8 percent month-on-month decline...

...which should have been Rand-negative, but instead the market jumped to R17.71 before managing to find some last week oomph, closing at out in the lower R17.60s.

Sjoe, finally a chance to catch our breath and assess the damage.

Volatility & Risk Analysis

So what did such a volatile week mean for you in terms of your forex risk?

• The Average Daily Range for the week was 17c or 1.0% - which means that for every R1 million exposure the daily fluctuation (potential profit or loss) on average was R17,000 every day
• The Weekly Range (total fluctuation) from the highest point to the lowest point was 45c or 2.6%. This means by taking action at the right time you could have saved a R45,000 for every R1 million exposure...

  ...while not doing so would have meant a forex loss of R45,000!

This highlights the importance of having an objective system for timing your hedging and conversions to enable you to:

• Mitigate potential losses and
• Take advantage of favorable market movements.

And as you can from our forecast prior to this past week's move, just this one forecast could have meant all the difference in helping you make the right decision at the right time - at a fraction of the cost of your risk!

The Week Ahead

Looking ahead this week, we have US Durable Goods and local Inflation data to digest.
And then, of course, we have the global tensions as well as the final countdown to the US elections.
Of interest, in stark contrast to most mainstream polling (which have shown considerable bias in past elections) it would seem that the market is betting (literally) on a Trump victory.
What makes us say that?
Simply take a look at betting platform Polymarket's 2024 Election Forecast, which shows that for those prepared to put their money where their mouth is, Trump is currently sitting at 62.5% expectancy of winning, and well ahead in swing states.
Not something you will see the mainstream media pointing out, but this is as close to real polling as you can get, with a just over a week to go.
Stay tuned, and feel free to share your thoughts or ask any questions!

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.

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