MARKET NEWS 29/03/2021

Good morning

If you, like me, are feeling short-changed after having to endure just a two day weekend worry not as a four day weekend is next in line!!! All we need to do is to get through a few pesky days of work to get there….  

These are the mid rates as at 7:40 today:

USD = R15.05

AUD = R11.47

GBP = R20.72

DXY = 92.82

EUR = R17.73

Brent Crude = $63.26 per barrel

Market News

• We may have a shortened week to look forward to but the Rand has gotten things off to a challenging start. Despite moving above the R15.00 barrier on Friday we ended up bumping our head at the recent resistance of R15.08 with this level holding firm, and then closed the day where we started at R14.97. But R15.00 has been breached again in early trade this morning as we open at R15.05.  
• Dollar strength is the Rand’s enemy right now with the Dollar Index continuing to hover at a four month high, and things could get worse later this week while we are enjoying the first day of our extended weekend. The back half of last week was characterised by positive developments in the US which underlined the strong state of their COVID recovery story and supported the Dollar. This Friday we get their monthly employment data and if it comes in strong, which would be in-line with the current trend, the Dollar could move higher still.  
• The following is from Reuters:  The Dollar began the week firmly, and within a whisker of milestone peaks against the Euro and Yen on Monday, as US economic strength and a vaccine rollout proceeding much more quickly than in Europe drew investors into the greenback. “The US is being helped on its own by some pretty good economic data, fantastic rollout of vaccines, good pace of vaccination and positive stock markets,” said Westpac currency analyst Imre Speizer. “The domestic economy is doing better than expected and likely to be the case for the next few months, so that might hold the US Dollar up and that’s what’s caused emerging-market currencies to pullback in March.”
• Dollar strength may be the dominant factor but a Bloomberg article suggests that economic data out of China this Wednesday will help emerging market currencies fight back. China is expected to announce strong performances across their manufacturing and non-manufacturing sectors which will confirm that their massive economy is roaring back towards full health, and with China now gobbling up raw materials that is typically good news for commodity linked currencies like the Rand.  
• Locally all eyes are on Cyril Ramaphosa with two major items on his to-do list. Rumours are circulating about SA moving to Alert Level 2 along with the tightening of various lockdown restrictions as we go into the Easter Weekend, and as always any curbing of economic activity is Rand negative. Balancing economic concerns against the threat of a third wave in infections must be a difficult task, but Ramaphosa is also trying to figure out what to do after a chaotic end to the ANC’s NEC meeting last night where his closing address has been postponed. The ANC Integrity Commission recommended that Ace Magashule step aside while his corruption case runs its course, a motion that has been supported by various elements in the ANC. But Ace and his faction are fighting back with the inevitable political noise threatening to hurt the Rand if things get out of control.  
• No local market data today.  
• Possible USD mid rate trading ranges in the Rand today are R14.90 and R15.20.