Rand Report 28/11/2022
Good morning
Congratulations to the Springboks for beating England at Twickenham for the first time since 2014, and with the Rugby World Cup next year English coaching legend Sir Clive Woodward summed it up nicely in saying that England got thumped even though we were deprived of nine first team players.?The Boks are looking good going into a crucial year ahead.?
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These are the mid rates at 6:35 today:?
USD = R17.13
AUD = R11.46
GBP = R20.65
DXY = 106.33
EUR = R17.75
Brent Crude = $81.31 per barrel
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Market News:
·????????Not such a good start to the week for the Rand I’m afraid as headlines out of China have sent risk assets lower.?Things were looking good late last week as we held ground under R17.00 to the Dollar before a slip to R17.09 at the close, and then in early trade this morning we’ve slipped to R17.17.??
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·????????The headlines dominating financial news outlets today all focus on a wave of unprecedented protests spreading across China.?Members of the public have reached the end of their patience when it comes to government’s strict COVID-zero policy with some cities now past 100 days where people have not been able to leave their homes.?In a terrible incident last Thursday a block of flats caught fire with 10 people dying, and protesters are saying that strict COVID regulations were to blame for making the rescue operation more difficult.?As tensions sore the Dollar is being bid up as a safe haven asset, and at the expense of the Rand.??
·????????The following is from CNBC:??The Dollar gained broadly on Monday as protests against COVID restrictions in China stoked uncertainty and dented sentiment, sending the Yuan sliding and pushing nervous investors toward the safe-haven greenback. "That's a new layer of concern in China that needs to be watched closely," said Rodrigo Catril, a currency strategist at NAB, of the protests. "Certainly at the start of the week, it will set the tone. And I suppose what will be the focus as well, will not only be the imposition of restrictions that China may introduce, if any, but the level of contagion as well."
·????????With last week having been a shortened US work week the next five days are packed with economic data releases along with numerous FED speakers, but the main events will be FED Chair Jerome Powell speaking on Wednesday, a US inflation reading on Thursday and then the monthly US jobs report on Friday.?As usual it’s impossible to know what these events will bring, but we can rest assured that the currency market will react to each.??
·????????The following is from Reuters and talks to Powell’s speech specifically which could support the Dollar:??FED Chair Jerome Powell is due to speak on the outlook for the US economy and the labour market at a Brookings Institution event on Wednesday, which will likely provide more clues on the US monetary policy outlook. "(He) is pretty likely to push back a little bit on that ease of financial conditions that we've seen in recent times. Ultimately, from a Fed perspective, the main concern is the fight against inflation, and that battle hasn't yet been won."
·????????Locally we also have a busy week ahead with private sector credit extensions plus the Q3 unemployment rate on Tuesday, our October balance of trade on Wednesday and then November’s purchasing manufacturer’s index on Thursday.?Hopefully tomorrow’s unemployment report can spring another surprise and improve just as the Q2 report did when a worsening in labour market conditions was expected.??
·????????No local market data today.??
·????????Possible USD mid rate trading ranges in the Rand today are R17.00 and R17.30.
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