Scarcely believable scenes as Donald Trump survives an assassination attempt during a campaign rally while one attendee is tragically killed and another two left seriously injured.? Events that could well shape the outcome of November’s election while also having an impact on the currency market.?
These are the mid rates at 6:30 today:
Brent Crude = $85.20 per barrel
- We can expect news headlines to be dominated by the failed Trump assassination attempt today and early indications are this could be Dollar positive.? The Rand managed to hold onto last week’s gains as we closed on Friday at R17.96 to the Dollar but in early trade this morning we slipped to R18.02, although we’ll have to wait for Europe and then the US markets to come online later on before knowing exactly how the currency market will react.? ?
- From the currency market’s perspective the Dollar is likely to benefit if Trump wins the election in November as his policies around trade tariffs, immigration, corporate taxes and fiscal spending suggest that inflation could stay elevated above the FED’s 2% target which in turn would make it difficult for them to lower interest rates.? The initial political commentary after the weekend’s events are that Trump’s image as a fighter has significantly improved his chances of victory, a change that was immediately seen with billionaires Elon Musk and Bill Ackman endorsing Trump after the shooting while contributing large sums of money to his campaign kitty.?
- The following is from CNBC and talks to Trump’s election bid getting a boost:? Saturday’s shooting at US former President Donald Trump’s election rally raises his odds of winning back the White House, and trades betting on his victory will increase this coming week, investors said on Sunday. The first shooting of a US president or major party candidate since a 1981 assassination attempt on Republican President Ronald Reagan could upend the Nov. 5 rematch between Republican Trump and President Joe Biden, a Democrat, which has been tight in opinion polls. “From memory, Reagan went up 22 points in the polls after his assassination attempt. The election is likely to be a landslide. This probably reduces uncertainty,” said Nick Ferres, chief investment officer at Vantage Point Asset Management.
- Political headlines aside last week was a good one for the Rand as not only did softer US inflation dramatically increase the chances of a September FED rate cut but it also appears that Japanese authorities took advantage of this development to intervene once again by selling Dollars while buying the Yen.? The end result was a fall for the Dollar Index down to 104.05, a move that saw the Rand strengthen to R17.96, and had it not been for a seismic shift in the political narrative the Rand was looking set to stay below R18.00 for a bit. FED Chair Jerome Powell speaks later today and after last week’s inflation report it will be difficult for him to sound hawkish on the FED’s policy stance, hopefully this will see the Dollar swing back to weakness.?
- The following from Reuters suggests we might see further intervention from Japan today given that their market is closed for a holiday:? Analysts said Monday’s holiday in Japan could make for ideal conditions for authorities to strike again given thin liquidity, similar to that of the?April-May rounds of intervention. “The confirmed FX intervention undertaken by the Ministry of Finance in April and May proved that policymakers are prepared to be canny about choosing the timing of their moves,” said Jane Foley, head of FX strategy at Rabobank. “In order to make more ‘bang for their buck’, FX intervention in quiet conditions or after the release of softer US economic data seems like a sensible move.”
- No local market data today.?
- Possible USD mid rate trading ranges in the Rand today are R17.85 and R18.15
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