And so we roll into another Weekly Rand Review as we take a look at how the local currency performed as it continued to be swayed by domestic and global headwinds...

...as it initially pushed stronger to hit its best levels in over 3 months...

...but then gave it all way as inflation in the US gave the greenback a big boost.

And in the midst of it all, we had Gold hitting new highs before collapsing, and US stocks experiencing another sell-off after their recent new highs.

So plenty of volatility, contrary winds and choppy waters, which the Rand did not do all that well in navigating, as we will see...

Key Moments (8-12 April 2024):

Some news highlights from the past week that caught our attention:

• Stubborn USA Inflation Boosts Dollar: Inflation increases month on month and year on year, dashing hopes of an early rate cut.
• Sell-off in Stocks and Gold After Highs: US stocks saw another week of red and gold also had a sharp sell-off after hitting new all-time highs

After a second week of solid gains against the Dollar, the Rand opened on Monday in early trade in the mid-R18.60s but lost some ground initially as it flirted with R18.75/$...

...before turning things round once, and thrusting down to a new 3-week low of around R18.54 against the greenback...

...but then seemed to take its foot off the pedal to end the day in the lower R18.60s.

Tuesday started off in similar fashion as the Rand initially tested the R18.65/$ level, but then pushed stronger as it powered its way below support levels to hit R18.41/$ - its best level in over three months!

An impressive performance indeed - but mostly a taking advantage of a Dollar that was having a faltering start to the week ahead of US inflation numbers...

The Rand pretty much kept in a 10c range below R18.50/$ for the next day as the markets awaited US inflation numbers...

...which would give some hint as to whether the Fed's elevated interest rate was having the intended effect - and whether rate cuts were on the immediate horizon or not.

The Rand initially spiked higher in mid-morning trade ahead of the release to hit R18.67/$, but then managed to pull back below R18.50 ahead of the news.

Then the news hit - and it was not quite what the market was anticipating...

...with annual US inflation accelerating for a second straight month to 3.5% in March - the highest since September, and above 3.2% in February.

What is interesting is to see the bigger picture and the effect that the current US administration has had on inflation...

...as can be seen from the chart below, the Consumer Price Index has taken a sharp turn north the past 4 years - with no sign of a turnaround yet!

This put a damper on any hopes of an early rate cut...

..and the markets reacted VIOLENTLY!

The Rand initially retested the low of the previous day, but then took off, as investors piled back in the US dollar...

...and the local unit was dragged along with hardly any resistance, losing almost 40 cents in a couple of hours...

...and stuttered away to end the day around R18.75/$!

How quickly things change!

Thursday saw the market test a bit higher towards R18.85 to the USD before the Rand managed to find some fight and regain some lost value to end around R18.65/$

And then it was Friday - but the show wasn't over - not by a long shot!

Friday is often the day for some action, and this was no different...

...as we saw Gold hit a new me high of 2431.55 before falling sharply shedding 4.2% of value in just a few hours...

...and US stocks also took another tumble, with the Dow Jones registering its second week of sharp weakness after its recent high last month.

And the Dollar also got a boost with the Rand again being dragged along in its wake, pushing the local unit to within a couple of cents of R19 to the USD before the Rand managed to recover some composure to end the week in the lower R18.80s...

All-in-all, rather a dismal performance from the Rand after such a promising start, but again one that gave opportunities for both importers and exporters to hop in at favourable levels - if the timing was right...

...and then it was weekend, and time to recharge the batteries!

The Week Ahead (15-19 April 2024)

As we enter into the second half of April, it seems that things aren't slowing down - or cooling down on the geopolitical front, with news that Iran had launched a strike on Israel over the weekend in retaliation for Israel's recent attack on Iran's embassy in Damascus...

...escalating tensions internationally to new levels. Let's trust cool heads will prevail.

Apart from the above, there are a few economic calendar events which have potential for some triggers, as the markets continue to look for clues of any interest rate changes on the horizon:

• SA - Inflation, Retail Sales
• US - Retail Sales
• UK - Inflation, Retails Sales

We have seen some interesting patterns developing on the Rand charts, and will be looking at some key levels this week to confirm likely direction for the coming days, weeks and months ahead...

Until we meet again, keep your wits about you!

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

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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.

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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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