Rand shaky in volatility despite Vaccine hopes

Well, we knew that the Rand's party against the Dollar had to come to an end sometime - and come to an end it did, as we saw the tables turn again this last week.

Despite all the uncertainty around the election results in the US, with actual and potential recounts - and mounting lawsuits by the Trump campaign - yet the Dollar shook this off as it recovered from last week's poor performance.

And locally there was a flurry of news too, as SA's anti-corruption drive picked up the pace!

And there was plenty more too - so let's get into the full review!

And here were the biggest talking points from the 5 days:

• SA lockdown - Ramaphosa finally surprised by more scope for SA to get back to normal, opening borders to travellers from all countries.
• Ace Magashule - the big name of the ANC was in the sight's of SA's prosecutors as a warrant for his arrest was issued
• Biden claims victory - the battle is far from over, but Joe Biden claimed victory in the US Presidential election, even as lawsuits, counting & recounting continued
• Vaccine news - it appears a more than 90% successful vaccine has finally arrived, just as the pandemic threatens to send the more countries into a second lockdown

So, as the Rand opened the week around R15.50, things were looking pretty rosy...

...and in a couple of hours, it was looking rosier still!

The Dollar had already crumbled to its worst level in 3 months following media projections that Joe Biden was on track to win the US elections.

But on Monday, it actually recovered on the whole - yet the Rand strengthened vs the USD all the way to R15.20/$.

Illogical markets strike again…!

But getting back to the US election, despite Biden claiming victory, the battle was far from over...

Trump & his team continue to dispute the results - and have filed multiple lawsuits across key battleground states.

In the House of Representatives, the Democrats lost seats but still claimed the majority, while the Republicans secured 50 seats in the Senate, with the remaining two going to a special election in January...

...standby for that one, as it is going to be a major trigger!

As for the Rand, it started the week off well, but sadly it did not last.

The following few days saw a sharp move weaker again, touching R15.70/$.

Back to the US, most news stations extended Joe Biden electoral college lead, with only Georgia and North Carolina remaining to be called..

Georgia is undergoing a recount, while it appears NC will fall into Trump's hands.

But as mentioned, the show is far from over, with mounting disputes and legal challenges to election results in Michigan, Pennsylvania, Arizona and possibly Nevada and Wisconsin.

So don't hold your breath.

Expect this to end up in the US Supreme Court before a US President is elected (remember George W Bush and Al Gore in 2000)...

An interesting few weeks lie ahead.

And then in other news:

• Ace Magashule, a stalwart of the ANC, is sitting in the crosshairs of South Africa's prosecutors, as the corruption drive continued to pick up steam. While this was positive news (surely) for SA, even that was not enough to stop the Rand's run weaker through the 5 days. Ace has long been a thorn in Ramaphosa's flesh, and now it seems like it will be the end of that frustration for the president. But watch as this story develops, as Magashule stated to the crowd in Bloemfontein, "You won't remove me"…
• On top of that was Pfizer, the newly proclaimed vaccine king - having produced a vaccine with the potential to bring the pandemic under control. With a mass scale testing complete, more than 90% of the vaccines were successful, giving nations huge confidence that things could change for the better.
• And then on Wednesday came the big news for SA - level 1 of lockdown was getting easier with travel being allowed from all countries going forward. Alcohol sales will also be back to normal from retail stores. The optimism from the vaccine news is very real, and this has certainly changed governments outlook on the future, even as countries like the US endure their worst daily cases records.
• And then in the UK, Brexit debates rolled on with Johnson battling to stem the tide. His latest loss is Lee Cain, his communications chief and one of the tight-knit group of Brexit campaigners. Johnson is in a difficult position with the pandemic creating a second lockdown, a battling economy and now Brexit negotiations continuing to progress no further. What will come next for the UK...?
• And then lastly, locally, South Africa's unemployment came out at record levels (as was expected), with now 30.8% unemployment rate, leaving more than 6.5 million without work. This number is likely closer to 50% in reality, but the way the stats are calculated means that it is 'softened' somewhat because of calculation formulae used.

Lastly, we get back to the Rand for the week...

Thursday and Friday saw some consolidation, trading mostly in the R15.70-15.50 channel, waiting for a breakout.

We eventually closed the South African day at around R15.59 before strengthen back down to test R15.50 after hours.

And that was the wrap for the week!

This week ahead will give us a change (at least you would think so), but the same talking point will be the US election outcome as the challenges and legal disputes continue.

• What will come of the US election legal challenges?
• Will the recounts change the playing field?

Nobody quite knows, just yet...so we will watch and see.

Regardless, here are some of the events ahead of us:

• SA - Retail Sales, Interest Rate decision
• USA - Retail Sales, Jobless Claims

As for the Rand, expect plenty volatility once again. We will keep looking at our Elliott Wave based forecasting system to give us some clues, with some key levels that we will be watching to confirm the larger degree trends.

Another interesting week lies ahead!

Please 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. No charge. No card. All yours to trial for 14 days.

(You don't want to regret not having done so this time next week...)

Look forward to hearing from you.

To your success~

James Paynter