Forex Market Report - 14 November
Good morning
The Rand suffered a double blow yesterday as local and international events conspired against us, but for the time being the key resistance level of R15.00 to the Dollar has held firm which is a positive.
These are the mid rates as at 7:45 today:
USD = R14.93
AUD = R10.15
GBP = R19.18
NZD = R9.55
EUR = R16.42
Brent Crude = $63.02 per barrel
Market News
- The day ended up fairly flat yesterday but that was after we made 4 separate attempts at breaking above R15.00 to the Dollar. We opened the day at R14.94 and had repeated spikes to R15.00, but fortunately this level held firm before the Rand settled back down at R14.93 by the market close.
- Locally all eyes were on our retail sales print for September which has an important baring on our overall Q3 2019 GDP performance. Analysts had forecast a jump from 1.1% to 2% so the actual number of 0.2% was a big miss to the downside and hurt the Rand. Retail sales makes up 60% of our overall GDP, and with the first and second quarter GDP numbers effectively cancelling each other out (-3.1% in Q1 versus +3.1% in Q2) that leaves it up to Q3 and Q4 to try and push us above market forecasts of 0.5% for the year. Unfortunately yesterday’s data has made this more difficult.
- The following is from EWN: Retail sales rose 0.2% year-on-year in September following a revised 1% increase in August, data from Statistics South Africa showed on Wednesday, another sign Africa’s most industrialised economy will struggle to top the 1% mark this year. “These figures are consistent with other indicators of real economic activity which continue to show that domestic underlying economic conditions remain poor,” Nedbank economists Isaac Matshego and Dennis Dykes said in a note.
- The Rand would also have come under pressure from a range Chinese data sets that came in weaker than expected yesterday, and with China being one of our major trading partners any signs of a continued slowdown in their economy spells bad news for the Rand. Data that disappointed included their retail sales, industrial output and investment figures.
- From the US FED Chair Jerome Powell completed the first of his two day testimony in front of the US Senate and the good news for the Rand was he made no mention of the need to lift interest rates in the foreseeable future, but the bad news was he felt that the US economy is strong enough to not need any further cuts until the end of 2020 at the earliest. The Rand has benefited from falling US interest rates but if they are going on hold for 12 months that leaves it up to us to conjure up Rand strength rather than rely on Dollar weakness.
- Local market data today sees our September mining production stat out at 11:30 and this sector is forecast to remain in negative territory at -2%.
- Possible USD mid rate trading ranges in the Rand today are R14.80 and R15.10.
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