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Good morning,
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On the wires…
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· US tells France and Germany to release diesel stocks or face US export ban
· Global bond rout deepens, pushes US Treasury yields to 24-year peak
· Discovery, Momentum announce steep hikes for 2027 – far above recommended rate
· Legendary SA musician Babsy Mlangeni dies at 83
· End date for green ID books announced books in South Africa announced – 31 March 2028
· 2027 Cricket World Cup: Proteas drawn in Group B, Wanderers to host final
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Quote of the day
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“Friday is my second favourite F-word.” — Darynda Jones
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The indicators
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Indicator
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Price
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Change
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Ranges
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$ / R
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16.66
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+10
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16.40 – 16.80
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€ / R
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18.76
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+4
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18.60 – 18.90
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£ / R
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22.01
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+9
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21.80 – 22.10
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AUD/R
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11.56
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+6
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11.45 – 11.65
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€ / $
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1.1257
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-0.0047
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UST 10 Year
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5.25%
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-0.10%
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Indicator
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Price
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Change
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Gold $
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4 180
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-3
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Brent $
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100
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+1
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DOW
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50 926
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+0.04%
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JSE Top 40
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100 172
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-0.61%
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$ index*
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101.90
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+0.49
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Bitcoin $
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85 992
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+2 536
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Source: Reuters / Investing.com
*The $ Dollar Index measures the value of the US Dollar against a basket of 6 foreign currencies including EUR, JPY, CAD, GBP, SEK and CHF.
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Currency crackdown…
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FXOne would like to thank CHAT GPT Pro for its unbiased contribution to the dose this morning.
- The rand came under pressure through the week, with losses against the dollar, euro and pound, although the weakness was most pronounced against the dollar. The broader move still looks more externally driven than SA-specific, with global risk sentiment and renewed dollar demand doing most of the work.
- The US dollar remained well supported, helped by elevated Treasury yields and expectations that US interest rates may need to stay higher for longer. Markets have become more cautious around how quickly the Fed can ease policy, which has kept pressure on emerging-market currencies.
- US data and Fed expectations remain the main global focus. Stronger economic data continues to create uncertainty around the timing and extent of future rate cuts, while any softer labour-market or inflation data could quickly take some pressure off the dollar.
- South African data has been relatively encouraging, with signs of improvement in manufacturing activity and vehicle sales. This has helped reinforce the view that the recent rand weakness has not been driven by a major deterioration in domestic fundamentals.
- The SARB’s recent rate hike to 7.25% remains supportive for the rand from an interest-rate perspective, but local policy support has so far struggled to offset the stronger dollar and broader global risk backdrop.
- Oil prices remain a key risk for South Africa. Brent is still elevated, which keeps pressure on fuel prices and imported inflation and could begin to weigh more meaningfully on consumers if higher energy prices are sustained.
- Looking into next week, the rand is likely to remain highly sensitive to US data, Treasury yields, Fed commentary and oil prices. Any easing in the dollar could allow for some recovery in USD/ZAR, while another leg higher in US yields or oil would likely keep the rand on the back foot.
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On the radar…
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· ZAR –ALL – Iran/ US peace attempts
· USD – Nonfarm payrolls
· USD – Average hourly earnings
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Did you know?
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Fungi are more closely to animals and humans than they are to plants.
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