Rand Report 27/07/2021
Good day,
Tatjana Schoenmaker won silver in this morning’s 100m breaststroke final, and with Chad le Clos into the 200m butterfly final and Bianca Buitendag into the surfing semi-final things are looking up for Team SA.?Plenty more to come from the Olympics so hopefully our medal haul keeps growing!!!
These are the mid rates at 7:20 today:
USD = R14.80
AUD = R10.92
GBP = R20.47
DXY = 92.61
EUR = R17.47
Brent Crude = $74.90 per barrel
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Market News?
领英推荐
·????????The Rand deserves a medal for how we turned things around yesterday after a break above R15.00 looked all but certain.?We opened the day at R14.86 to the Dollar and immediately spiralled weaker, but just as we hit R14.99 our fortunes swung for the better with a recovery all the way to R14.75.
·????????China is cracking down on their tech companies with eye watering drops across the sector yesterday sending risk-off shockwaves through the market and contributing to our early fall to R14.99.?No tech company was spared with Tencent falling by 7.2%, but it was China’s online tutoring sector that really took a beating with up to 40% falls as this $120bn industry was told that they may be converted to non-profit organisations so as to lower the cost of education, and ultimately promote population growth which amazingly is an issue China faces right now.?For now this crackdown remains contained to China and hopefully the currency market’s initial shock remains short lived.??
·????????Of more concern for the Rand is the looming FED meeting which starts later today and concludes tomorrow night.?The Dollar has been on the offensive over the past two months with the market readying itself for the gradual tightening of US monetary policy, and with the Dollar having been heavily shorted during the “looser for longer” months data now shows that investors hold net long Dollar positions for the first time since March 2020 which is a clear sign of changing sentiment.?For now the Dollar Index has failed to challenge its recent resistance of 93.43 but all eyes will be on Jerome Powell tomorrow night.??
·????????While continued Dollar strength is the prevailing narrative there are always contrarian views and the following is from Reuters:??Since the FED met just six weeks ago, what had seemed a blue-sky setting has become clouded by a quadrupling of daily COVID-19 infections led by the more-contagious Delta variant to levels approaching those seen in last summer’s coronavirus surge. “With the Dollar, you’ve had a pretty sizable rally,” said Mazen Issa, senior FX strategist at TD Securities. “On a short-term cross-asset valuation base, it actually looks to be a bit rich against most of the G10, particularly against currencies that have more hawkish central bank pricing.”
·????????Of course there are no foregone conclusions and there remains the real possibility that Jerome Powell will use the rising COVID cases in the US to temper his eagerly awaited policy announcement.?This would hurt the Dollar and benefit the Rand and the following is from CNBC:??Even if the worst of the new outbreak is concentrated among less-vaccinated communities, economists see it potentially changing consumers' willingness to spend and travel, and say it will likely require the FED to strike a balance between keeping faith in the recovery while taking explicit stock of what could go wrong. Developments since the last meeting "strengthened the case against pulling back on accommodation prematurely," given the new uncertainty about the recovery and despite higher-than- expected June inflation, Goldman Sachs economist David Mericle wrote.
·????????No local market data today.
·????????Possible USD mid rate trading ranges in the Rand today are R14.65 and R14.95.?
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