Forex Market Report - 8 April

Good morning

Unfortunately a bit of Rand weakness greats us this morning but that is to be expected after such a barnstormer of a week last week, this as the Rand posted a 2.83% gain against the Dollar during the week. 

These are the mid rates as at 8:30 today:

USD = R14.14 AUD = R10.03

GBP = R18.47 NZD = R9.52

EUR = R15.88 Brent Crude = $71.15 per barrel

Market News

• The Rand was on the front foot throughout last week and had US jobs data to thank for a late surge on Friday afternoon. Breaking below R14.00 to the Dollar is our immediate goal and we got pretty close as the Rand touched R14.02 in late afternoon trade. 
• The stars aligned for the Rand last week which culminated in our biggest weekly gain since early January. Moody’s decision on the 29th of March to not only leave our credit rating unchanged but also to not even bother with an official credit statement meant the Rand was seriously in favour last week. In financial markets single events seldom have an impact longer than a few days so for the Moody’s decision to keep fuelling the Rand’s recovery from Monday to Friday shows just how relieved investors are that we were not downgraded. 
• While local sentiment was buoyant last week we were helped by continued progress in the US vs China trade negotiations. The latest round of talks wrapped up in Washington late last week with statements from both camps sounding very positive. Donald Trump chimed in saying that swift progress had been made, and predicted that we will know the outcome within the next four weeks, and as has been the trend recently emerging market currencies have found support on positive trade developments. 
• One final boost for the Rand came from the US jobs report, which while posting a credible 196 000 new jobs (up from a shocking 20 000 new jobs in February) the average hourly wage growth came in lower than expected at 0.1%. Lower wage growth is always Dollar negative as this backs the case for the FED holding off hiking interest rates, and the Rand almost broke through the R14.00 barrier as the Dollar sagged on the wage announcement. 
• The Pound is trading as the most volatile currency across developed and emerging markets as Brexit scenarios change almost hourly. That is likely to continue this week as the UK is scheduled to drop out of the EU without a deal this Friday unless that can either come up with a new deal (highly unlikely) or convince the EU to extend the deadline yet again (very likely). Brexit turmoil pushed the Pound lower on Friday with our exchange rate touching R18.28 and we can expect further peaks and troughs as Friday’s deadline looms.
• No Local market data today and not much this week until Thursday when we get our February mining and manufacturing data, both of which are expected to disappoint given the impacts of load shedding.  
• Possible USD mid rate trading ranges in the Rand today are R14.00 and R14.30.

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