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FXOne would like to thank Warrick Butler from Standard Bank for his valued contribution to the currency crackdown.
Good morning
“Don’t you hate it when someone answers their own questions? I do”.
Current USDZAR level: 18.9600/18.9700.
Rand range last week: 18.4200-18.8600 and NY Friday close: 18.6700.
Rand – Large reaction to all things Trump overnight with the Rand having a gap open higher on the Wellington open last night. The US president pulling all aid to SA apparently and this throws into question the AGOA pact. So, it is buy the rumour time again. At the same time, he signed into effect tariffs against the bad 2 (Mexico and Canada – 25%) whilst China got away with 10% this weekend. It seems we are back to kindergarten stone throwing in the political world, all of which means EM is the kid that everyone picks last, or not at all. Crypto got smashed which I guess is people liquidating the quickest assets to move into a cash situation. Not quite a risk off environment as the usual safe-haven markets haven’t seen a flood of cash just yet. Quite interesting to see that UST’s have barely moved since Friday. A case of China boycotting the US? Anyway, Rand hit a high around 19.0300 last night and has pulled back a touch this morning. Not sure how much downside is possible with all the negativity and uncertainty around and very hard to be a Rand bull now. Support at 18.8500 should hold, whilst 19.2000 offers resistance.
Good luck and have a good week ahead.
Support levels – 18.8500, 18.65/62, 18.43/45, 18.30/25, 18.1200, 18.0000, 17.8500.
Resistance levels – 19.00/05, 19.20/25, 19.30/35, 19.5000
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