Not long to go till we don’t have to squeeze our daily exercise routine into the chilly morning hours. Moving to Level 4 seems like it happened an age ago and there is building excitement that Level 3 will deliver a real change to our daily lives.
These are the mid rates as at 8:15 today:
USD = R17.45
GBP = R21.48
EUR = R19.11
AUD = R11.58
NZD = R10.80
Brent Crude = $35.50 per barrel
- The Rand is also in a buoyant mood as we set yet another best level in our COVID-19 recovery. We opened at R17.49 to the Dollar which was the worst level of the day and quickly strengthened to bounce between R17.33 and R17.40 for the rest of the day. R17.33 is the Rand’s best level since the 27th of March, a time when the Rand was in freefall towards R19.35, and from a technical perspective if we manage to close below R17.29 that opens the door for significant gains into the R16.20’s.
- As mentioned yesterday there are two international themes pulling in opposite directions and the Rand is at the mercy of these forces. On the one hand is a risk-off sentiment from renewed US-China tensions and on the other, we have a risk-on sentiment from the easing of lockdown restrictions coupled with rapid advances in vaccine and treatment headlines. Fortunately for the Rand, the risk-on camp won yesterday’s battle, and with the Dollar Index dropping below 99 points for the first time since the 4th of May that helped the Rand hit R17.33.
- But the sentiment is a fickle thing and this morning we have seen increased protests in Hong Kong while Donald Trump confirmed he will announce Washington’s response to China’s proposed security legislation before the end of the week. China has also confirmed that the new laws will not only apply to individuals but to organisations as well, and with this, the US has pledged to pay all relocation costs for American companies wanting to exit Hong Kong. This spat definitely has the potential to spiral quickly and the market is taking note through the Dollar Index moving back up, and in so doing putting the Rand on pressure.
- The following is from Reuters: The Dollar edged higher on Wednesday as worries about the US response to China’s proposed security law for Hong Kong supported safe-haven demand for the greenback. “We are in a broad risk-on trend, but the only thing that can change this is the US-China relationship,” said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo. “More problems between these two countries would slow the Dollar’s recent decline and potentially lead to Dollar buying as a safe haven.”
- We could see movement in our Euro exchange rate today as the European Commission presents its COVID-19 recovery plan later today. The Euro strengthened recently as France and Germany suggested a €500bn rescue fund, an idea that was quickly shot down by Austria, Sweden, Denmark and the Netherlands, but if we get concrete plans today that could further strengthen the Euro and hurt our exchange rate.
- No local market data today.
- Possible USD mid-rate trading ranges in the Rand today are R17.20 and R17.60.
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Forex update by Jody Fabre