August 20, 2021

Currency News

Currency News 16 August 2021

Currency News 16 August 2021

What we know


Following our cabinet reshuffle, traders have been playing a game of chicken with one another in the midst of further global risk-off sentiment.

The Rand attempted another test of the R15/USD level and was initially fuelled by a bumper Jobs Openings data released out of the US early last week. This saw the Rand traverse all the way to R14.90 over the next couple days before seeing the momentum fizzle out, failing to successfully close the gap to the ominous R15/USD level. Subsequently, Rand volatility has been trending lower as we await direction from the next news event.

As exciting as cabinet reshuffles and having former presidents arrested is for Rand trading, this week we look towards more traditional events for guidance. Wednesday sees SA print inflation and retail data – this should give us a lagging indication of the impact the civil unrest locally has had on our country. It will most likely reinforce the SARB’s call to hold rates steady at a record low of 3.5%.


What others say


ReutersAfghanistan is peaceful, Taliban say, chaos engulfs airport

“Peace prevailed across Afghanistan on Monday, Taliban officials said, as the militants declared the war over a day after seizing the capital, while Western nations scrambled to evacuate their citizens from an increasingly chaotic Kabul airport.”

IB Times One COVID case sees China partially shut down one of its biggest cargo ports

“China shut down a key terminal in one of its biggest cargo ports after one worker tested positive for COVID-19, Chinese state media have announced.”

Financial TimesThe age of the ETF is looming

“No one blames mutual funds writ large for every bout of idiocy that has befallen investors in one, and ETFs should not be treated as a homogenous blob either. The mutual fund is not going the way of the dodo any time soon, but the next age of investing likely belongs to the ETF.”


What we think


The Rand seems to be finding comfort below R15.00/USD and the longer it fails to break through the key level, the greater the psychological power it begins to command over the market.

Our domestic data is unlikely to surprise many this week as one would expect the market to have priced in the turmoil caused by the civil unrest already. Of course, this does not account for any surprises – as they say, the devil is in the details.

The third wave in South Africa has not sustained its initial downward trajectory as may have been predicted. The Western Cape and KZN received the baton from Gauteng and have been keeping up the pace ensuring repeated national prints above 10,000. We anticipate the Rand will trade rather muted this week with attempts at a retest of the resistance surrounding the R15/USD level on the back of continued Covid-19 infections.

Our range for the week: R14.60 –R14.98.


Have a great week!