Hidden Riptides Beneath Calm Rand Waters...

Welcome to our latest Weekly Rand Review...I would like to know what you think of it!

Ever been to the beach on a day when the sea looks so inviting and safe...

...only to find that under the surface there are some significant riptides that drag you away from the safe zone...

...or even worse, can drag you out to sea?

That was the Rand this week.

If you looked at it over the week, it seemed like nothing really happened. Despite all that was going on:  Trump cranking steel tariffs to 50%. The Fed stumbling around like they lost their GPS in downtown Joburg. And to top it all, Iran got some very surprise 'gate-crashers' at their three nuclear facilities.

And our beloved Rand? Moved a whopping 3 cents for the entire week.

But here's the sneaky part.

Under that calm surface, the Rand was actually bouncing around like a ping pong ball in a washing machine...  

...big moves up, big moves down.

Actually more volatile than we have seen in a while:

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Monday kicked off with the week with an SA holiday. But even with thin liquidity, the Rand put in a 25 cent range — a surprising amount of action for a market that looked like it was treading water. The pair tested both support and resistance, but neither gave way.

Tuesday brought even more energy, with the Rand swinging 29 cents during the day. Traders were positioning for the Fed, while local flows remained subdued. Everyone was waiting for the central bank playbook to be revealed midweek.

Wednesday was the big Fed day. The U.S. held rates steady as expected, but Powell’s tone left markets more puzzled than reassured (while Trump's response was anything but complimentary).  Despite all the noise, the Rand stuck to its zigzag pattern, dancing in an elevated range.

Thursday saw Trump's tariff escalation hit the headlines. Steel and aluminium duties were doubled to 50%...but markets barely flinched. Emerging market currencies, including the Rand, seemed immune — either from fatigue or expectation. The Rand nudged the R18.15 resistance but was swatted back down.

Friday was a tug-of-war between month-end flows and caution. Local corporates stepped in to square up, while global traders stayed light ahead of the weekend. The range narrowed, but support and resistance zones remained untouched. The Rand closed the week barely 3 cents weaker from Monday’s open.

And then, of course...

...we had the surprise military action over the weekend by the USA in taking out Iran's three nuclear facilities, with Trump immediately calling for peace.

And while everyone was frenzied about this escalating into a wider war with boots on the ground, it seems that instead we are looking at peace. 

After decades of warnings about Iran being just months away from having a nuclear weapon, a US President has actually done something about it to completely take away the threat—and the need for war.

Another 4D chess move?

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So, quite a week!

But not much to show for it as far as the Rand was concerned.

However, here's what most people overlook:

Even though the Rand barely moved across the week, those sharp daily swings were anything but trivial — they were the kind of moves that could hand you a tidy windfall…

...or leave you licking your wounds, depending on where you stood.

On average the daily swings were 22 cents (or 1.2%)...

...with a weekly range of 43 cents (2.4%).

Enough to make a serious impression on your profit margin either way — based on when you acted.

Which means that in this game, you need to understand where the market is heading over your exposure period — as well as your decision window.

Timing is everything!

History teaches us that trends don't last for ever - just like the tides.

And neither do trading ranges — like a lazy cat lulling you into thinking all is calm…

...until the claws come out.

Those that have been around long enough know that what worked last year or last month, could hurt you badly this next month or year.

Because trends don't last forever (from yearly trends, to monthly, weekly, daily—even down to hours, minutes or seconds). 

And neither do trading ranges as we saw this past week.

That is why you need a dynamic and forward-looking hedging and execution strategy.

One that gives you a heads-up about that possible shift just around the corner...

..so when the trend breaks, you have already made plans to adjust your strategy.

Not scrambling to catch up after the storm hits.

Until next week.

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This weekly newsletter is brought to you courtesy of Dynamic Outcomes, a Rand forecasting service focused on assisting exporters, importers and individuals in making more informed and educated decision around the timing of their foreign currency transaction – a critical factor in any risk management strategy. This is centred around providing an objective view of where the Rand is expected to move against the Dollar, Euro and Pound over the short, medium and long term.

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Disclaimer: The content of this Weekly Rand Review has been prepared by and constitutes the opinion of Dynamic Outcomes, a division of Dynamic Forex Solutions LLC (DFS); it is solely for informational and educational purposes and is not to be taken as advice, or an offer or solicitation to buy or sell the securities or financial products mentioned in the content nor a recommendation to participate in any particular trading strategy. No past performances of any strategy or forecasts are a guarantee of future performance; trading in financial markets involves substantial risk, and you need to do your own due diligence in managing this risk. While every care has been taken in ensuring that the content gleaned from third parties is from reliable sources, no responsibility or liability will be accepted by BeztForex or DFS as to the accuracy of the information contained here, which may be subject to correction or amendment at any time after publication.