The Tide Finally Turns for the Rand...and You?
- Dynamic Outcomes
- Jul 30
- 7 min read
Welcome to this week's latest Rand Review...
...and it was certainly a pivotal week.
Because something shifted, almost unawares.
It is like watching the ocean on any day...
...it is so fascinating because it's never the same.
The waves are different every time. The weather changes.
The colours shift with the light.
But there's something that's always consistent, but almost so subtle, you hardly realize it's happening:
The tides.
No matter what else is happening on the surface, that deeper rhythm just keeps flowing...
...but it is not always apparent on the surface.
But then you realize that the waves are coming further up the beach.
Wave after wave pushing higher. Each one reaching a bit further up the sand..
...for hour after hour.
Then suddenly...it stops.
The water sits there for a moment, almost confused -- like trying to decide which way to go.
And then you have that last wave re-testing the high-water mark...
...and the tide suddenly turns.
Well, that's exactly what we saw happening with the Rand this past week.
For months we've been watching this steady incoming tide...
...beautiful for importers, perplexing for exporters .
The Rand just kept getting stronger and stronger from April's R19.93 high, grinding down to test below R17.50, with everyone either getting really excited (importers) or increasingly anxious (exporters) about where it might go next.
But this week?
The tide finally turned. And when it did, it happened fast.
We started Monday around R17.69. By Friday afternoon we were sitting near R17.74...
...seemingly just a modest 5-cent loss.
But that tells only half the story.
Because what really happened was the Rand surged to R17.48 during the week—re-testing its strongest level in 8 months—before collapsing back through R17.70, as can be seen by the chart..
The tide didn't just turn. It turned violently.
Here is how it played out
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Then over the weekend, the White house announced that an historic deal had been reached with the EU, with an across-the-board 15% tariff for all EU imports, a $600bn investment in the US, and an opening up of Europe markets to US auto and industrial exports, and purchasing $750 billion of energy from the US...
...Trump once again managing to get a deal that reverses the US's crippling trade deficit.
Clearly, the world is entering into a new phase of global trade relationships.
Countries that don't secure agreements face significantly higher tariffs, with the globe split into those with US trade deals and those without.
For emerging market currencies, this creates an entirely new dynamic. Success waon't just about domestic fundamentals anymore—it's about your country's position in the evolving global trade architecture...
...as well as which friends you choose, as BRICS nations are finding out, with an extra 10% tariff likely to be levied for these countries to trade with the US.
This might all seem very unfair, but when you realize that the US has effectively been every counties benefactor for decades, opening its markets to everyone for free, while being restricted from selling its goods, it is a tide that also could only run for so long...
...but it needed someone with the proverbial gonads to do something about it.
Then over the weekend, the White house announced that an historic deal had been reached with the EU, with an across-the-board 15% tariff for all EU imports, a $600bn investment in the US, and an opening up of Europe markets to US auto and industrial exports, and purchasing $750 billion of energy from the US...
...Trump once again managing to get a deal that reverses the US's crippling trade deficit.
Clearly, the world is entering into a new phase of global trade relationships.
Countries that don't secure agreements face significantly higher tariffs, with the globe split into those with US trade deals and those without.
For emerging market currencies, this creates an entirely new dynamic. Success waon't just about domestic fundamentals anymore—it's about your country's position in the evolving global trade architecture...
...as well as which friends you choose, as BRICS nations are finding out, with an extra 10% tariff likely to be levied for these countries to trade with the US.
This might all seem very unfair, but when you realize that the US has effectively been the world's benefactor for decades, opening its markets to everyone for free, while being restricted from selling its goods freely, it has been a tide that also could only run for so long before it runs out of steam (and money)...
...but it needed someone with the proverbial gonads to do something about it.
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Anyway, to get back to the Rand, here's what that dramatic tide change last week actually looked like:
Weekly net move: 5 cents weaker (0.3% loss)
Highest point hit: R17.83 (Friday's explosive surge)
Average daily range: 18 cents (1.0%)
Weekly high-low spread: 34 cents (1.9%)
What does this mean for an exporter or importer?
That 18-cent average daily swing meant R180,000 of daily volatility risk on a $1 million dollar position...
...while the week's 34-cent range put a substantial R340,000 at stake.
So, how do you manage this sort of risk?
It comes down to understanding that the currency markets move in trends or cycles....
...just like the oceans.
And just like the tides change, so do currency trends.
The Rand's incredible run from R19.93 in April to R17.48 last week has been one of the year's standout emerging market stories. A strengthening of R2.45 (more than 12.3%) in under 4 months.
Impressive stuff!.
But no tide runs in one direction forever....
...and so it was with the Rand, as the trend changed - decisively so!
The problem is when these trend changes take you by surprise...
..,so that you act too early (when you should have waited)
...or you act when it is too late (missing the opportunity when you had it).
Both are very costly...
...but avoidable...
...if you had the RIGHT INFORMATION at the RIGHT TIME!
And that is precisely why we rely on our Rand forecasting system to give us the heads-up as to when these trends are changing, whether it is over the short. medium or long term trends.
And once again it did just that last week...
, as you can see from the forecast update that we published on Wednesday, which showed the market was at the high-water mark, and the tide had either turned or was about to turn...
And we were expecting the Rand to then weaken significantly.
Which is exactly what happened!
How do we do this?
Crystal ball? Luck? Guesswork?
None of these.
Quite simply, our system uses a combination of methodologies to track the Rand's natural rhythms (cycles of sentiment) in different degrees.
It identifies when momentum is shifting before the crowd realizes what's happening. It gives you advance warning when the ocean is about to start flowing in a different direction.
Which is essential in this game.
Because here's what I've learned from the last 30 years of experiences and graduating from the School of Hard Knocks:
When you can spot the tide changes early, you stop getting caught swimming against the current...
...and instead you start positioning for the next wave...
...instead of trying to ride the last one - after it is already past you.
So, what is the lesson from this past week's tide analogy?
Quite simply, it comes down to this.
Every forex strategy has an inherent risk...
...but a fixed or arbitrary strategy guarantees it!
Because currency markets move in cycles...
...and so should your forex strategy.
That's exactly why we created the Rand Forecasting System—which has helped thousands of exporters and importers as well as multi-nationals over the past two decades navigate the ever-changing currents of the markets.
It has given them a roadmap for what's likely coming next before it happens, and provides the framework for a dynamic hedging strategy that adjusts for the changing trends...
...complete with price targets, timing, and backup plans if the preferred bias gets negated.
Question is: Are you still sticking with a strategy that worked before, but is now causing you sleepless nights?
If so, I would love to chat and show you what is possible..Hit the reply button and let's book some time.
Until then.
To your success~
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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.
BeztForex have arranged for our clients to try out the Dynamic Outcomes Rand forecasting service for a full 14 days at no cost and no obligations:
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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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