October 23, 2023
MyCURRENCY News | Week 43 2023
What we know
Perhaps everyone had their minds on the Boks’ semi-final this weekend; however, last week’s Rand price action was very uneventful, albeit that we did trend slightly weaker against both the GBP and EUR, while standing still against the softening USD.
Although local headline inflation for September was higher than anticipated, core inflation was comfortably lower, and a rate hike at the final MPC meeting of the year on 23 November continues to seem off the cards.
Rather, attention is shifting towards next week’s medium-term budget speech (MTBS) and the risks that entails. It’s hard to recall when last we approached a MTBS with anything resembling optimism and we can only hope that there aren’t any severe negative surprises or revisions in store next week, and that the current bearish outlook is already priced into the Rand.
Globally things continue to be… a mess. Wars, economic and social challenges, global warming and more, it’s hard to chat to anyone who’s feeling particularly bullish about the current state of affairs. With such muddy waters, we’ll continue to be swayed by the whims of global investor sentiment.
What others say
Reuters – Argentina’s Peronists soar in election to seal run-off with radical Milei
“Argentina’s ruling Peronist coalition smashed expectations to lead the country’s general election on Sunday, setting the stage for a polarized run-off vote next month between Economy Minister Sergio Massa and far-right libertarian radical Javier Milei.”
Visual Capitalist – Mapped: The largest Stock Exchanges in the World
“… by 2050, Goldman Sachs projects that emerging markets’ share of global stock market capitalization will surpass America. Given the strong economic growth of emerging markets, investors may find opportunities in broad market indexes that track these countries.”
Daily Maverick – After months of tension, Department of Justice puts up R6m for legal reviews of the State Capture Report
“The Department of Justice has freed up R6-million for the next six months up to the end of March 2024 to provide for the legal bills of private attorneys currently working on several high court reviews of the State Capture Commission’s final report.”
Morning Brew – Uh-oh: The economy is doing really well
“In a closely watched speech at the Economic Club of New York, Fed Chair Jerome Powell conveyed a similar message to the climate protesters who briefly interrupted him: It’s too hot.”
What we think
Last week we wrote that “…the US Dollar Index (DXY) did also bounce back towards the end of last week, which makes the rands resilience ever more impressive. The ZAR’s momentum does however seem to be waning and so without more impetus, may start to peter out”.
The lethargy of last week’s trading is perhaps encapsulated by the fact that our forecast range for the week of R18.70/USD – R19.15/USD held almost exactly to the cent on both sides of the range, with market participants simply going through the motions at current levels. With most significant data (the ECB interest rate decision and various US releases) only due Thursday and Friday, we see little reason for the trend to change.
Our range for the week: R18.90/USD – R19.35/USD.
Have a great week ahead.