MyCURRENCY News | Week 49 2023

To call the USDZAR’s most recent price action ‘range bound’ feels a little bit generous as that usually implies a somewhat tight trading channel. Last week saw us open at R18.65/USD, then run to a low of R18.45/USD before reversing back up to a high of R18.97/USD – a ±50 cent spread during the course of a week. We have been in this range for the past two weeks with us now sitting a little closer to the previous high than we would perhaps prefer – currently R18.85/USD.

Domestically, there has been some respite as loadshedding has retraced to more palatable levels – the sting of stage 6 does still linger as we know that at any moment ‘wet coal’ could send us spiralling once more into darkness. 

We also have our own GDP numbers today and expectations were for us to have contracted by 0.2% YoY, but we have unfortunately come in worse at -0.7%. The QoQ data tells a similar story with us having contracted by 0.2% following two positive prints. Both are a likely symptom of our continued energy security issues, export woes caused by the backlogs in our ports as well as an unwinding of commodity prices over the past two quarters (excepting gold +4.25%) – palladium and platinum have come undone by 31% and 9% respectively. 

What others say

Daily Maverick – How real is Roger Jardine as SA opposition’s next big hope?

“There’s been much speculation that the Multi-Party Charter is looking for a single presidential candidate — and that person could be the former FirstRand chair Roger Jardine. While this will encourage those who believe a grand coalition is needed to unseat the ANC, most of the Multi-Party Charter’s problems will remain.”

Bloomberg – China seen targeting ambitious 2024 growth goal at key meetings

“An “upbeat” growth goal of 4.5% or higher would help “guide expectations and boost confidence,” according to economists at Morgan Stanley. Targeting a rate that high would mean a “visible acceleration” in growth given the two-year compound annual growth rate in 2023 is estimated to be just around 4%, they wrote in a report last month.”

Visual Capitalist – The rise of the U.S. Dollar since the 19th century

“As the world’s reserve currency, the U.S. dollar made up 58.4% of foreign reserves held by central banks in 2022, falling near 25-year lows. Today, emerging countries are slowly decoupling from the greenback, with foreign reserves shifting to currencies like the Chinese yuan.”