The northern hemisphere summer is approaching its final few months of the year so if you haven’t done so yet make sure that you’ve booked your trip on super yacht Malia, a floating tribute to opulence and luxury where you and 11 friends can cruise the Med for just R26m a week!!!? ?
These are the mid rates at 6:00 today:
Brent Crude = $80.79 per barrel
- Speaking of weeks that Rand has just had a very good one!!!? We opened on Monday at R18.32 to the Dollar and after last week’s chaos we were right to be a little nervous of what lay ahead.? As it turns out the Rand has now strengthened for seven days in a row which is its longest winning streak since June 2023 with us hitting R17.96 yesterday as the day, and the week’s best level.? US data briefly knocked us back to R18.08 in the afternoon session but risk-on sentiment then came to our rescue with us opening today at R17.99.
- This week had three major US data events for the Rand to navigate and while the producer and consumer inflation reports pushed us stronger on Tuesday and Wednesday respectively it looked like we had tripped on the final hurdle that was yesterday’s retail sales report.? The market has been highly sensitive to US data over recent weeks thanks to lingering fears of a potential US recession in our near future, and these fears had seen bets of an outsized 50bps cut by the FED is September climb to 71%, but things have changed in the last day or two with those bets falling to just 25% and pushing the Dollar Index up from 102.50 to 103.91 which saw the Rand briefly fall to R18.08.
- The reason or yesterday’s Rand scare was the July US retail sales report, although ironically this report was also the reason for our recovery soon after.? Predictions of the FED cutting by 50bps so as to “save” a floundering US economy had weighed on the Dollar but any fears around US economic activity evaporated when it was announced that July’s retail sales came in at 1.0% growth month-on-month when just 0.3% was expected, and not only was this more than double the forecast but it’s also a major improvement from June’s contraction of -0.2%.? Confirmation of a strong US consumer base was joined by the weekly jobless claims number coming in lower than expected and the resultant Dollar strength put pressure on the Rand.? ?
- The following is from Reuters yesterday and talks to the Dollar’s move higher:? ?The Dollar held gains against the Euro on Thursday, pulling the European common currency back from a seven-month peak, after US economic data eased fears of recession risk and dampened expectations for aggressive interest-rate cuts. "This morning's data absolutely crushed remaining bets on a half percentage-point move at the FED’s September meeting," said Karl Schamotta, chief market strategist at Corpay. "Fear of a 'hard landing' in the US economy has been almost fully unwound and FED officials are seen responding with a more cautious start to the easing cycle."
- Much better US data than expected looked to have tripped the Rand up but fortunately the equity market absolutely loved the diminishing threat of a US recession, and with stocks enjoying yet another day of strong gains this risk-on sentiment swept the Rand up as a risk asset and took us back below the R18.00 threshold.? It must be noted that while positive US data has been good for us this week if things get too strong then it wouldn’t be a surprise to see analysts start to question whether the FED needs to cut rates at all in September, and that would push the Dollar significantly higher to our detriment.? Let’s see how the data comes in from here.
- 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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