Friday has arrived and with it the first sitting of our new national assembly where South Africa will finally find out just who will be leading the country for the next five years.? This afternoon also marks the start of a much needed long weekend which is equally exciting!!!
These are the mid rates at 6:20 today:?
Brent Crude = $82.33 per barrel
- The Rand looks set to register decent gains for the week as we opened on Monday at R18.88 to the Dollar and go into today’s final trading session at R18.44.? Granted, we have given up a little ground from Wednesday’s best level of R18.30, but a weekly gain is always a good thing, and if political headlines go our way then there is definitely a chance of further gains before the weekend.?
- One can only imagine how many frantic talks have been going on across our political landscape over the past two weeks, both between parties and within each party, but the deadline is here and our new government is about to be confirmed.? It would appear that the ANC, DA, IFP and a number of smaller parties will make up our new government of national unity but with the EFF and MK not being included, and therefore becoming the opposition parties in matter of political debate.? On the face of it this outcome should be good for markets and good for the Rand, assuming that the GNU is actually able to work well together, but proceedings start at 10am so we don’t have long to wait and see what’s happening.?
- On the international front the Dollar took a direct hit on Wednesday when US CPI came in lower than expected across the board, and while a more hawkish FED announcement than was expected helped the greenback pair some of its losses it was still down on the day.? Dollar weakness was good for the Rand but unfortunately it didn’t hang around for long as the Dollar Index climbed back up to 105.26 yesterday, this despite another cool inflation report showing producer input prices falling as well as a much softer than forecast jobless claims report.? The FED changing their rate cut projections from three to one cut this year was all the market had eyes for, and this helped the Dollar regain all of its lost ground from the previous day.?
- The following is from CNBC:? The Dollar gained on Thursday despite a soft US producer price inflation report for May, after the FED adopted a hawkish tone at the conclusion of its meeting on Wednesday. But optimism over cooling inflation was not enough to keep the Dollar down. "It was a bit overdone, the reaction to that CPI. It was almost a relief that it wasn't worse. And that's what sparked such a strong knee-jerk reaction," said City Index market strategist Fiona Cincotta. The Dollar is likely to remain supported as FED policy contrasts with more dovish international central banks. “I'm not convinced that the dollar's top is in place on this move. We might not be yet at the maximum policy divergence,” said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York.
- The FED’s quiet period where no interviews can be given in the 12 days before a policy statement is over and today we get four FED speakers who will be closely watched for further hawkish signs, or not.? The Rand will be hoping that they don’t push the Dollar even higher, but with the FED’s dot plot being an anonymous projection we have no idea whether today’s speakers are part of the eight members who voted for two cuts this year, or whether they feel either one or zero cuts is the way to go.?
- No local market data today.?
- Possible USD mid rate trading ranges in the Rand today are R18.35 and R18.65.
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