Whew, what a week it has been for the Rand and the world, with events in the US taking centre stage...

...from the aftermath of Donald Trump's attempted assassination (and the many questions surrounding it), to Trump's nomination, to the massive Crowdstrike failure, then to Biden's optng out (being pushed out) of the presidential race over the weekend...

...and it seemed to be a week for investors running to safety, with the the Rand getting the rough end of the deal

.Let's climb into the details with another Weekly Rand Review

Key Moments (15-19 July 2024):

In some major headlines over the last five days:

• Trump Assassination Attempt Rocks Markets: A very near miss on the front-runner for 2024 shocks the world, with many unexplained security lapses.
• Interest Rates Still on Hold: SARB and the ECB kept rates at current levels.
• Global Cyber Outage: A massive outage due to a 'software update' from cybersecurity company CrowdStrike left the global grid hamstrung..

The week opened with the Rand in one of the rosiest positions it has been since August last year, as it kicked out the gates in the mid-R17.90s...

...but our analysis from the previous week showed this was unlikely to continue, as can be seen in the below chart published on the Friday prior:

(Click to enlarge)

As can be seen from the above forecast, our predictions for the following week signaled that the market was expected to bottom out above 17.8661 before rising strongly to push up into the R18.17-18.37 area...

...as always, we didn't know what events would trigger such a move, but just that sentiment would turn Rand negative in the coming days...

And sjoe, what events were about to unfold!

Of course, the markets were closed on Saturday, when Donald Trump miraculously survived an attempt on his life at a rally in Pennsylvania, being just millimeters away from certain death...

...with many questions being raised about the multiple and obvious security failures that allowed such a thing to happen...

...even more so with the inconsistencies in statements and actions since from those ultimately responsible in these departments!

Suffice to say, if the attempt had been successful, it likely would have likely led to unprecedented chaos for the country...and beyond.

Of course, this spooked financial markets, and the Rand felt the heat, as investors raced for hills...

...the USD/ZAR tested R18/$ before the SA trading desk opened, and when it did, the floodgates opened, and the market pushed higher throughout the SA session, testing R17.28 per US$ before the Rand managed to pull things back by about 11c before NY close.

And, within just a few hours of trading, our forecast of Friday had been validated

Tuesday opened with the Rand around R18.17 and initially it looked like we would see a follow-through from Monday, as the market re-tested the prior day's high, but the Rand managed to turn things around at this point and pushed the market all the way back down to a couple of cents off R18/$...

...a pretty impressive pullback!

Before the dust had settled from Trump's assassination attempt, the Republican National Convention (RNC) kicked off on Tuesday for the official nomination of their candidate.

Trump, who appeared at the emotionally-charged event, also used the opportunity to announce his running mate, Ohio Senator JD Vance.

On the economic side, the day was marked by US Retail Sales data showing zero growth for the prior month, down from 0.3% the previous month, as data continues to show consumers are battling to make ends meet.

Wednesday saw the rollercoaster ride continue, as the greenback found renewed vigour, all-but reversing the Rands gains of the prior day, testing R18.27 before giving back some ground in late trade to see out the day a couple of cents below R18.20/$...

...the Rand's cause was not helped with SA's Retail Sales showing a drop of 0.7% compared with the prior month's gain of 0.5%.

Thursday was a bumpy ride, as the market whipsawed through the day, testing lower and higher as the day progressed ahead of the MPC's and the ECB's expected unchanged interest rate decisions...

...with the USD finally winning the day thereafter to close out in the mid R18.20s.

In other news:

Thursday evening saw the 3-day RNC culminate in Trump's official GOP nomination acceptance and speech (amidst increasing rumours that Biden was being pressured to step down from the race after his inept performance in the debate).

Interestingly, this coincided with a global cyber outage caused by a 'software update' from cybersecurity company CrowdStrike affecting Windows systems, resulting in major disruptions across multiple industries worldwide. The update led to outages in systems used by airlines, healthcare providers, financial services, manufacturers and more, resulting in canceled flights, delayed medical appointments, and disrupted banking services.

It just so happens that the disruption into Friday also coincided with Trump's first call with Ukraine's Zelensky since his nomination in which the Russia/Ukraine war was discussed and Trump's commitment to bring an end to it...

...you may remember that CrowdStrike was the company involved in THAT call (which led to an impeachment inquiry) when Trump asked Zelensky to look into them with their involvement in the whole Russia-gate saga.

Strange timing, but then, of course, it may be pure coincidence...

But nevertheless, the incident does raise serious concerns about the concentration of cybersecurity services and the vulnerability of interconnected global technologies, and how easily the global network could be brought down.

What if this happened on election day??

To get back to the Rand...

Friday opened with the local unit around R18.23 per USD, but was immediately under pressure as the market climbed up to R18.37 (the upper level of our target area)...

...before the Rand once again bounced back to push the market back down to win the day, closing out around R18.21 to the Dollar.

Not a positive week overall for the Rand, but all things considered, it could have been a lot worse - in many respects!

The Week Ahead (22-26 July 2024)

Well, Monday dawned with more political circus news over the weekend, confirming that Joe Biden had, in fact, decided to step down from the presidential race, endorsing Kamala Harris, this coming with just over 3 months before the elections...

...it seems election year is serving up curved balls in many countries!

Apart from the ramifications of the past week's events, there are a few potential economic triggers:

• SA: Inflation
• US: Durable Goods, GDP Growth, Inflation

Once again, hopefully, we have shown that you don't need to know what is going to happen to provide some idea of market direction, because these events are merely triggers for the underlying sentiment.

As a result - our clients had a heads-up before all the unfolding events, giving them just what they needed to make informed and educated decisions.

Until next week, please keep your head in these volatile times!

And a warning to buckle up: We are expecting a bumpy ride the next few weeks and months.

So, once again, an impressive performance for the Rand, but we are approaching some key levels which will prove critical in the days to come.

Until next week, please keep your head in these volatile times!

Are You Making Informed Decisions?

To give you a little helping hand, feel free to take our Rand forecasting service for a test-drive!

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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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