MARKET NEWS 15/02/2021

Good morning

Excitement, trepidation, confusion and chaos, and these are the scenes from just my household as the school year finally kicks off!!! It’s going to be a manic morning out there, good luck everybody!!!

These are the mid rates as at 6:40 today:

USD = R14.50

AUD = R11.29

GBP = R20.18

DXY = 90.33

EUR = R17.62

Brent Crude = $63.63 per barrel

Market News

• Gridlocked traffic as frenzied parents try to figure out the school run will make for a challenging start to the week but fortunately the Rand is already out of the starting blocks and moving stronger. Friday afternoon saw us slip to R14.69 to the Dollar but the evening session took us to R14.54 and we have opened slightly better today at R14.50.  
• We may be in for a busy day with schools re-opening for the first time in 2 months but the Rand should enjoy a more sedate start to the week thanks to the US market being closed for President’s Day. As is always the case on a Dollar holiday there will be no forex transactions of any kind, and while the Dollar Index is still able to move, which will impact Rand price action, these moves should be muted.  
• Speaking of the Dollar Index it remains on the back foot thanks to last week’s theme of a strong US recovery being overly priced in. A spate of weaker than expected jobs data has seen the market re-evaluate its assumption that the US is leading the global recovery story (outside of China) which has seen the Dollar fall to $1.38 to the Pound and $1.21 to the Euro, and the Rand has benefitted with us sitting at R14.50 this morning. 
• The following is from Reuters and points to further Dollar declines should their market data continue to disappoint: The Dollar started the week pinned near two-week lows on Monday as traders questioned whether the recovery from the pandemic in the United States would be as fast as expected. “The rebound in the Dollar was initiated by relative US economic outperformance, or expectations thereof,” said Shinichiro Kadota, senior currency strategist at Barclays Capital in Tokyo. “Now the market is looking for actual evidence that the US economy is outperforming. The economic data needs to improve.”
• Birthday wishes go out to the Rand as our heavily traded emerging market currency turned 60 yesterday!! We have moved up from 20th to 18th on the list of globally traded currencies and remain the top dog when it comes to a liquid emerging market currency, and the following excerpt from a Bloomberg article underlines the positive international sentiment towards the Rand:  “South Africa is one of the successful transformational stories within emerging markets,” said Sergey Dergachev, senior portfolio manager for emerging market debt at Union Investment in Frankfurt. The perceived stability of the central bank and economic policies have underpinned its attractiveness as a proxy.
• No local market data today. 
• Possible USD mid rate trading ranges in the Rand today are R14.40 and R14.70.