Rand Shrugs Off Moody’s & Oval Office Drama…as Bitcoin Rockets Past $110k
- Dynamic Outcomes
- 2 days ago
- 5 min read
Another week, another round of ‘what now?’ for the Rand...
Eish, it seems the Rand is wearing some suit of armour the past couple of weeks.
While Moody’s slaps America’s credit and banks, Trump roasts Ramaphosa in the Oval Office, and Bitcoin tears through six‑figures...
...yet the Rand ended stronger than it started again—make sense?
Market Pulse 📊
Price Action: R18.12-17.81 range, with an average daily move of 17 cents
Technical Setup: Support R17.85 then 17.80, resistance R18.04 & 18.12
Momentum: Rand losing momentum, but still strengthening bias
Correlated Moves: DXY slipped below 100, gold kissed $3 295/oz then slid, Bitcoin ripped to $110 636,
The Rand kicked off the week at R18.05/$, and by the time Jo'burg traders switched on their screens, Moody's downgrade of major US banks had hit the news desks, following a downgrade of US debt.
While the Rand initially strengthened below R18/$, the market soon reversed to close around R18.07/$ as traders hedged their bets ahead of a big news week, especially for Saffers, with the president heading to the White House mid-week.Tuesday was pretty much one-way traffic as the market hedged its bets ahead of Wednesday's anticipated showpiece.
It certainly did not disappoint...as Trump’s midday presser exploded across every news feed.
In an unprecedented move, the US President used the opportunity to show footage and evidence to back up the White House allegations of persecution (and justifying the fast‑tracking of refugee status for threatened SA farmers and other individuals fearing persecution)...
...in a move which forced a reluctant mainstream media to air live what they have continually stated were "baseless claims"...
...and causing the South African President (and most of those with him) to squirm uncomfortably in their seats.
While we are not sure what happened behind closed doors thereafter, you can be sure it was not all pleasantries, with the US government having plenty of issues to discuss with the ANC-led government, especially their alignment with US adversaries and their socialistic/communistic agenda and objective...
...it will be interesting to see what comes out of this.
The Rand actually managed very well in the circumstances, closing around R17.95/$ in after-hours trade
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And in other news...
Trade Deals Move ForwardIt appears a number of trade deals with the US are moving forward in negotiations, with revised dates for tariffs kicking in as a result, one of the most important being with China where the U.S has the biggest trade deficit amongst its trading partners.
One thing is for certain: in 6 months’ time, global trade as we have known it for the past few decades will have changed completely.
Bitcoin Breaks above $110,000
Bitcoin continued to shine this past week as it pushed above $110,000 in a move which surprised many.
But for those that have been getting our forecasts, this was exactly where we saw it heading, with our updated analysis showing some potential targets for the next few weeks and months.
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Getting back to the Rand...
The Rand opened a shade heavy at R18.02/$—then Stats SA dropped the April inflation bomb: 2.8 % year‑on‑year, bang below SARB’s lower band.
This hinted at lower rates, which should have been Rand negative, but it did the opposite as the Rand immediately spiked down to R17.92 before most desks had topped up their coffee.
But it didn't stay that way, as traders then drove the market up to hit.R18.07/$ before the Rand managed to pull back and close below R18...once again!
Friday’s tone was set long before Jo’burg switched on...
..as the US Dollar index cracked the century mark in Asian trade.
As the Rand greeted sunrise at R18.02, Rand bulls dipped a toe and—seeing no real resistance—pushed the market down to R17.88/$ before breakfast...
...and then pushed home the advantage, punching the week’s low at R17.81 and cementing the fourth straight day below eighteen to the greenback.
A hotter‑than‑forecast US PMI gave the greenback a brief sugar‑rush, but the move lacked conviction as the market closed near its low for the week......its best levels in over 5 months!
...four sessions under eighteen and a weekly gain of 24c in the bag—proof the Rand can still dance while headlines burn.
Volatility & Risk Analysis
Much-reduced volatility, but still nothing to scoff at:
Average Daily Range: 16.7c or 0.9% (equating to a potential profit or loss of R167,000 every day for every $1 million exposure)
Weekly Range (total fluctuation): 33c or 1.8% (equating to a possible saving or loss of R330,000 for every $1 million exposure)
Time to remember:
“Markets don’t move on logic—they move on how hard traders panic…or party.” |
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The Week Ahead
Another pulsating week is already underway, with more trade deals on the cards, SARB's hand being forced into a possible rate cut...
...while the Ukraine/Russia peace negotiations seem to have taken a step back amid allegations of attempts on Putin's life and missile attacks from both sides on cities.
It seems there is no end of drama, which means no end of volatility!
And that means—and we say it every week—timing really is everything…
Until next week...
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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.
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