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Daily Dose

25 February 2021

Good morning,

 

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On The Wires...

  • Pope’s personal doctor dies of Covid- 19
  • Tiger: no charges for reckless driving
  • Mboweni holds off major tax increases, promises R19.3 billion for vaccine rollout
  • SABS has new standard for hand sanitizers
  • Abalone worth R2.7 million seized in CT
  • Stormers coach ponders 3 options for captaincy

Two Cents Worth…

“Some people want it to happen, some people wish it to happen, others make it happen.”- Michael Jordaniday

Currency Crackdown...

FXOne would like to thank Jan Sluis- Cremer at RMB Global Markets for his contribution to the crackdown this morning.

Yesterday was all about the budget and the market initially liked what the Finance Minister has tabled in an attempt to get the economy back on track and also to stabilize our high levels of debt. As the headlines from the budget hit the news wires, we saw the local unit trade down to 14.40 in thin trade. This is the best level of the rand in 13 months. However, the euphoria was fairly short lived, and the rand drifted back up to 14.65 before closing around 14.55 in the New York session.

The move on the rand from 14.40 back to 14.65 was largely driven by a stronger dollar across the board, as Emerging Markets lost some ground driven by the Turkish lira. The lira lost ground on speculation that the central bank may backtrack on policies that it had put in place earlier this year that led the currency to one of its biggest rallies. Policy makers tightened liquidity by boosting reserve requirements, and thereby raising concerns that they were shying away from outright interest rate hikes.

This morning in Asia, the dollar remains under pressure as commentary from the Fed Chair, Jerome Powell, supported risk appetite. Commodity currencies have also all rallied to three-year highs led by the New Zealand dollar.

This morning the rand gets underway at 14.50 to the green back. We remain firmly in current ranges of 14.45 to 14.75 and a close either side is required for new direction.

Against the crosses, Eur/Zar kicks off at 17.65 while Gbp/Zar is 20.52.

On the data front the day gets going at 11:30 local time with our January PPI numbers. Midday attention turns to the Euro zone for their February confidence numbers. 15:30 we cross the Atlantic for weekly jobless claims, durable goods orders for January and fourth quarter GDP. The day is finished off at 18:00 with the Kansas Fed manufacturing activity index for February.

On the radar...

  • All – Global vaccine updates
  • US- Durable goods orders
  • US- jobless claims
  • SA- PPI
  • EUR- consumer confidence
  • US- Q4 GDP data

Did you know?

Michael Jordan was set on becoming a weatherman if his basketball career did not work out. In 2020, his net worth was estimated to be $1.6 billion.

 

Have a good day,

Wayne

 

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