June 24, 2024
MyCURRENCY News | Week 26 2024
What we know
Last week followed through on the positive Rand sentiment as we gained another 3% on the Dollar, trading within a range of R18.40 – R17.86. We can thank the new GNU for the momentum, as markets hold onto the view that a government of national unity was indeed the best case (given a few impeccably poor choices).
The Rand managed to make a relatively large gain against the Dollar, all while the Dollar, as measured by the Dollar index, is showing some strength, which speaks directly to how the market is reacting to the current political climate in South Africa.
Our inflation figure was released locally, which printed at 5.2% Year-on-Year, 0.1% above the forecasted figure, while inflation Month-on-Month came in as expected at 0.2%. Although these figures reflect the challenge in bringing inflation under control, we still saw a stronger Rand following this announcement.
On a global level, yet another bank decided it was time to cut interest rates as we saw the Swiss National Bank remove 25 basis points from their policy rate, while the Bank of England decided to hold their interest rates flat at 5.25%.
Other than that, negative manufacturing data out of the European Union led to a weaker Euro throughout last week, following the ECB rate cut one week prior.
From a technical standpoint, the market found somewhat of a resistance below the R18.00 big figure at around R17.90 on Wednesday and Friday with the market trading back above the R18.00 level on both occasions.
What others say
Daily Maverick – Trump and Zuma – authoritarianism, nationalism and inflammatory populism
“Mismanagement and corruption by the ANC have decreased trust in democracy, to the point where 64% of South Africans surveyed by the Human Sciences Research Council’s South African Social Attitudes Survey expressed dissatisfaction with the state of democracy, compared to an all-time low of 22% who were satisfied.”
Yahoo! News – Biden-Trump’s first presidential debate could change everything. Here’s what you need to know – and how to watch.
“The first debate in U.S. history between a sitting president and former president is expected to be a defining moment for Biden, 81, and Trump, 78.”
Visual Capitalist – Ranked: The Countries Receiving the Most Remittances From Abroad
“The Indian diaspora – measuring nearly 18 million people – collectively sent more than $125 billion back to the country in 2023. In fact, India became the first country to ever receive more than $100 billion in personal remittances in 2022.”
Reuters – Are you dreamscrolling? Three ways to avoid overspending
“Empower’s new study found that Americans spend 2.5 hours a day, or 873 hours per year, modern-day window shopping and gazing at dream purchases.”
What we think
Last week we said…“the main driver in the market will be whether the newly formed Government of National Unity is able to bring about a real change and improvement for South Africans.”
As we are navigating new political terrain, this will certainly come with its challenges. Currently 10 out of the 18 parties have joined the Government of National Unity, and with this comes discussions over the number of seats in cabinet being allocated to each party.
As these events continue to unfold, and as feathers get ruffled, the Rand may see a little bit of volatility and potentially an unwinding of some of its recent gains.
With the election dust beginning to settle, we can expect ‘normal’ market mechanics to come back into play, and we should feel a sense of familiarity as the Dollar begins dictating most of the market movements again.
Our range for the week: R17.90 – R18.30.
Have a great week ahead.