Rand Report 15/01/2025

Good morning

Here we go again!!!? Most of 2025 still lies ahead of us, another year filled with challenges and opportunities. I have no doubt that you enjoyed a relaxing festive break and with your batteries recharged, it’s time to get back to life/work/normality!!!

?

These are the mid rates at 5:55 today:

USD = R18.94

AUD = R11.73

GBP = R23.12

DXY = 109.23

EUR = R19.53

Brent Crude = $80.02 per barrel

Market News:

·???????? Our batteries might be recharged but for the poor old Rand 2025 is already feeling like a very long year.? Not that we’ve done anything wrong as the current state of affairs is 100% thanks to Dollar strength, but we open today at R18.94 to the Dollar while the prospect of deeper losses remains very real.

·???????? R18.94 is a bad exchange rate but just two days ago things were quite a bit worse, this as we had fallen to R19.23 which is the highest level since April 2022.? The new year might only be couple of weeks old but already there is a distinct theme that is driving price action in the currency market, and that is all centred on how many times the FED will cut US interest rates in 2025 (or even at all!!!).? In December the FED spooked the market when they adjusted their “dot plot” which previously pencilled in four rate cuts this year, but this was revised down to two.? The prospect of fewer cuts is Dollar positive, and the greenback got a noticeable boost at the time, but things have gone from bad to worse for us since then.??

·???????? The Dollar has been on the front foot in recent weeks but this was amplified last Friday when we got the monthly US jobs report which showed their labour activity over December.? The market was expecting 155?000 new jobs to be announced and so it was a big beat to the upside when 256?000 was the number, and even though their unemployment rate dropped from 4.2% to 4.1% this was not enough to stop the market from adjusting its view on potential rate cuts down to just one in 2025 (possibly as late as September).? The Dollar Index shot up to 110.17, its highest level since November 2022, and in so doing condemning the Rand to R19.23 in the following trading session.??

·???????? If it helps at all it must be noted that we are not alone, this as the Pound, the Euro and all other currencies are wilting in the face of unrelenting Dollar strength.? Fortunately we got a small dip in the greenback yesterday which has allowed us to move back below R19.00, albeit only just, and the catalyst was the US producer inflation report which at a core level was expected to grow by 0.4% but it came in at 0.2%.? This better than expected report hopefully sets things up for the more important consumer inflation reading that comes out at 3:30pm today, and if we get a repeat of lower numbers then the Dollar should slip a little further.? Of course the opposite is also true, and if US CPI comes in hot then the Rand will take a direct hit.??

·???????? Keeping abreast of US data reports is important as they always move the market but the biggest item on the immediate calendar is Donald Trump’s inauguration next Monday.? Speculation around the size and the breadth of his tariff policies has kept the market on edge since he won the election in November but we don’t have long to wait to see how this all unfolds.? As things stand the market views his potential policies as inflationary, and the Dollar has found support as a result, but the Rand is hoping that his team will guide things in a more measured approach which could dent the greenback.?The year is still very new but next week is an important one!!!

·???????? No local market data today.

·???????? Possible USD mid-rate trading ranges in the Rand today are R18.80 and R19.10.

?

INTERNATIONAL INVESTMENT OFFERING!!!

Foundation Fund Managers gives you the opportunity to invest in international shares which gives you direct access to owning the likes of?Google, Mastercard, Amazon, Apple, Starbucks, Adobe, Ferrari, VISA, Adidas, Microsoft?or any other company listed on the London Stock Exchange, NASDAQ or NYSE.?

We also offer local share portfolios with a bespoke selection of stocks listed on the JSE.? ?

For more information please contact?Brody Scott?on:

082 419 7194 or?[email protected]