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Daily Dose

2 April 2020

Good morning,

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On the wires

  • Without tourists to feed them, Thailand's 4 000 elephants could be among coronavirus victims
  • Sri Lanka police make record $65 million drug bust
  • Confusion in Russia after Putin announces a nationwide vacation
  • Coronavirus leaves South Africans stuck overseas
  • Ekurhuleni clinic closed after nurse tests positive for Covid-19
  • Olympic sports fret over lost Games income

Two Cents Worth...

“When you encounter various trials, big or small, be full of joy. They’re opportunities to learn patience.” - Scott Curran

Currency Crackdown

The rand continues to show wild swings during the trading day with the currency ranging between 17.80 and 18.05 against the USD yesterday. While things got worse overnight, with the rand collapsing to an all-time high level at 18.28 against the dollar before settling down to 18.10 this morning. South Africa as a whole is still under immense pressure with the ongoing lockdown compounding an already dire economic, while global sentiment is firmly against risk assets amid as the coronavirus continues to flourish abroad with more fatalities and extended lockdowns in other countries. The rand is particularly vulnerable to this negative sentiment because of its wide current account deficit, low credit ratings and limited foreign currency reserves. No data on the cards for the rand so keep a close eye on the news and checking you pricing regularly.

 

Elsewhere, the USD was boosted by risk off sentiment, while the Fed continued on its path of aggressive monetary policy as it tries to calm the market amid fears of a slowdown. More and more in the US have issued stay at home orders to prevent further spread amid forecasts that the death toll from the virus will reach between 100-200k in the US alone. We have some key data due for the US Dollar today so be mindful as we enter the afternoon session. 

 

Looking towards Europe, the euro is struggling as fatalities rise in France and Spain, with further lockdown extensions imminent. With economic data coming in as expected the euro will remain under pressure with ongoing epidemic and little safe haven asset qualities. The pound is also under pressure and is one of the worst performing currencies in the world, but with markets starting to bet that the UK will ask the EU for an extension of its post-Brexit transition this might actually assist the pound for the time being. With no key data on the cards for the euro and pound keep an eye on news and covid-19 developments.

In other markets, Asian stocks declined in line with other global equity markets on reports that China lied about its coronavirus statistic. Gold is mostly flat, while oil has strengthened.

 

PLEASE KEEP IN MIND THAT THE INCREASED VOLATILITY AND LACK OF LIQUIDITY HAS MADE IT INCREASINGLY DIFFCULT FOR THE BANKS TO PROVIDE PRICING. QUOTES MAY BE WIDER THAN EXPECTED WHEN BOOKING DEALS. FXOne WILL BE WORKING REMOTELY SO PLEASE EXERCISE PATIENCE AND UNDERSTANDING THROUGH THESE ABNORMAL CONDITIONS.

On the radar…

  • EU – PPI MoM & YoY
  • US – Initial Jobless Claims
  • US – Balance of Trade
  • US – Factory Orders MoM
 

Did you know?

Grapes explode when you put them in the microwave.

 

Have a great day,

 

Keaton

 

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