Good morning, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
On the wires… | |||||||||||||||||||||||||||||||||||||||||||||||||||||
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Quote of the day | |||||||||||||||||||||||||||||||||||||||||||||||||||||
“I’m not good at the advice. Can I interest you in a sarcastic comment?” — Matthew Perry | |||||||||||||||||||||||||||||||||||||||||||||||||||||
The indicators | |||||||||||||||||||||||||||||||||||||||||||||||||||||
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Currency crackdown… | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Not a huge amount to report from the rand front yesterday. We did claw back a meaningful portion in the morning, having been the worst performing currency across the globe last week (!). However, we have since given that back up and sit near 16.80 again this morning. If anything, a brief move downwards is still more constructive than a move upwards, even if we did elastic back to levels seen last week. This suggests that while the worst of last week’s selling pressure has eased, investors remain reluctant to take on significant rand exposure ahead of several major global risk events. Despite lower oil prices and a slight improvement in risk sentiment, the dollar has now risen in seven of the past eight sessions and is trading near its highest level in a month. That underlying resilience explains why most emerging-market currencies, including the rand, have struggled to stage a sustained recovery. The other two majors have been relatively flat, although Sterling seems to be under some pressure as investors become increasingly concerned about the UK’s fiscal outlook. Combined with expectations that the Bank of England will leave rates unchanged, this has weighed on GBP performance. The euro and ECB seem to be out of the spotlight for now. The market’s focus has now shifted squarely to this week’s Fed meeting, where policymakers are widely expected to leave interest rates unchanged but could adopt a more hawkish tone following the recent surge in inflation and energy prices. Could we see another central bank surprise there? Alongside the Fed decision, investors will also be watching US economic data and a busy corporate earnings calendar, all of which are likely to determine the dollar’s next move. Until then, the rand is expected to continue to be driven by global developments rather than domestic factors. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
On the radar… | |||||||||||||||||||||||||||||||||||||||||||||||||||||
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Did you know? | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Human’s ability smell petrichor (smell of wet earth from rain) is greater than a Shark’s ability to smell blood in water. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
All the best,
Kyle Moulster
