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RAND

Longer-term USD/ZARThe golden cross of the 50-day MA above the 200-day MA is a long-term buy signal and possibly the start of a fresh impulse wave higher. The daily MACD has also recently crossed to a buy signal after the pair closed above the psychological 15.00 barrier earlier this week. A daily close above the current yearly high of 15.28 could be an early sign of another leg higher towards the 15.60 and the lower 16.00's. Fundamentally, the rand is still struggling to nurse its wounds from the July riots, the SARB is still maintaining a dovish stance (while other emerging market central banks from Russia and Brazil have started hiking) which dampens the rand's carry trade appeal and most importantly imo, precious metal prices (particularly platinum) are still trending lower which is rand negative. In terms of the broader market sentiment, as equity markets continue to hit record highs, crude oil keeps ripping higher and the US treasury yield curve remaining suppressed, I'm hesitant to call an end to the current risk-on wave, which is however rand positive. Yes, the fed has signalled for a possible taper recently and China seems to be reigning in its debt but nothing has spooked the bond or equity markets just yet. SA's trade surplus has supported the rand and tomorrow we'll get the latest trade balance results from SA for the month of September. It currently stands at a healthy surplus of R42.40 billion, but if we are to see a significant reduction of the trade surplus towards year-end, the rand could take quite a tumble.
by GustavFourie96
1
What Affects The USD/ ZAR This Week?Since we last checked in on the South African Rand (ZAR) in June 2021, the currency was appreciating toward multi-year highs of 13.37 ZAR per US dollar, previously not seen since January 2019. In the proceeding five months, leading up to the present, the USD has staged a comeback against the South African currency and is now level with the average exchange value for the first two months of 2021. Some wild swings occurred during the revival in the USD / ZAR, with many value-overshoots forcing quick corrections. That is to say, bullish sentiment didn’t last long without a bearish retracement with this pair. For the most part, retracements have been hugging close to the Fib levels. What are the factors affecting the USD / ZAR this week? Risk sentiment will play a large part in the USD / ZAR. Last week saw traders pull away from safer currencies such as the USD, indicating a risk-on sentiment was prevalent in the market. Over last week, coinciding with the start of November, the USD depreciated by 1.427% against the ZAR, squeaking below the 15.000 precipice. There are no hugely critical economic reports due from South Africa this week. However, next week the ZAR may be under pressure after announcing the Inflation rate YoY (October). Inflation is expected to increase by .2 percentage points to 5.2%, further pulling away from the South African Reserve Bank’s midpoint inflation target of 4.5%. Next week, US economic data might be worth watching, including Inflation Rate YoY (October) on Wednesday and JOLTS Job Openings (September) on Friday. Inflation in the US is predicted to get as high as 5.8% in the October reading, up from 5.4% in September. The JOLTS Job Openings should hopefully show some sign that the tight labour market in the US is beginning to loosen.
by BlackBull_Markets
1
What to do with the rand?? for a South African citizen, global assets are essential given the fact that the South African market only constitutes around 1% of the global market whilst the South African economy constitutes 0.4% of the global economy. Simply put, South African need exposure to assets which are susceptible to short term movements in the Rand. The chart shows the ZAR/USD exchange rate in blue and the local financial index in orange. For the most part they tend to have a negative correlation. In other words, if the rand strengthens, South African financials tend to do well and vice versa. We can see that the long-term trend for the rand is towards a weakening bias. In the short to medium term, movements in the rand impact the ability to show South African investors a good return on foreign assets. in other words the currency factor increases volatility for a Rand investor or at least someone who spends their money in Rands (retired investors). South African financial are showing cheap valuations which discount the financial turmoil that South African consumers are facing. Therefore there's a low base effect which needs to be factored in (possible repricing of the shares). On the other hand SA financials are also discounting the fact that there ability to grow their earnings is perhaps less than desirable. Select financials are likely to be better performers based on the merits of their business however, from an overall financial wellness perspective, the index is not all that attractive over a 12-18 month period. The question is, will this help support a bottom range for the Rand at around R14 to the USD? If so, the risk of an extreme strengthening event hitting the rand is probably closer to 20% - 25%. Does this potentially support the fact that the rand should be weaker in the next 12 - 18 months? The clear and obvious unknown to this scenario is that if the commodity cycle continues and indeed accelerates, South Africa's income statement and balance sheet become marginally healthier and therefore could result in a re-rating in the Rand and local financials. Its important to understand that it not about trading the rand but rather trying to quantify its downside risk from a Rand investor looking to offshore assets. If one was able to close their eyes and forget the volatility in the currency, well then problem solved however, investor behaviour doesn't allow for that... Please like and follow. Please also share your views on the trading ideas and whether or not you find them to be of any value to you as a trader. Please note, this idea is shared for educational and discussion purposes only and should not result in speculative investment decisions in any asset class.
by JesseMorgans
4
Down the conspiracy theory rabbid hole: Rand to go upUSDZAR: first they will sell their houses and belongings (for rands) Ok well you know what I think about South Africa, what I said about it + reading between the lines + what I say about other places and the world in general. It's simple the price moves because of what people are doing it's not magical. Riots don't magically make the currency implode, it's indirect, and right now people will sell for rands so it should go up at first. Sort of how the yen goes up when japanese sell their us stocks, or goes down before the us stock market goes up. The price moves because of supply & demand not Morgan Stanley saying the economy will contract by 3.5%. Which also means something can be completely wrongly priced because of "technical" details. Spreads are high but this is a large move, spread should be less than 5% of the stop loss. What would be magical would be the government going "no one should go hungry we will help you we are the saviors blablabla usual nonsense" and spending billions to "rebuild" and throw welfare around. Would provide juicy and long term shorts on the rand. In a few weeks. After I made money going long.
Short
by MrRenev
2
As predicted, things are getting worse in South Africa, part 2Guess it's time to follow up on my previous idea: Body count is going up. Some officers (including high up) going full racist, for example one guy was saying the indians choose their camp (whites). In a single raid over 1 million rounds were stolen, enough for a whole company to go to war (or capture more weapons). SANDF getting chased by civilians, bah this happens in France too no big deal, and in Turkey soldiers are used as scapegoats then beat up by mobs. Russia which is like the only country in the world not completely melted brain, recommended (strongly) to its nationals to stock up on food and water and lock themselves up at home during the pogroms. They didn't say bullets it seems, weird. I know that some guys have some tigers, I wonder how useful that is? Sorry but I have to mention this: only one store in Watercrest Mall was untouched, the rest was destroyed. The untouched store waaaaas .... THE BOOK STORE! 🤣🤣🤣 "We have no access to education we are 200 elo because of our teammates and the unfair game patches". (Some) Supply lines are destroyed. Queues of thousands to get in a store, never saw this before are these people for real? Factories burned down some leaking pollution. Boers going to have full stomachs and urban citizens going to go hungry let's go humanitarian bla bla bla would you like to make a useless donation to a useless NGO to feel better about yourself? Told for 4 years people in the west cities sucked and either get out or stock on food and I wrote about SA too. I did my part, more useful than NGOS imo. At least I help out smart people the rest is helpless it will never make a difference. I don't know Africa below the equator my guess is Zuma which was just sent to jail for looting is a bantu zulu or something and Cyril something something is the same or almost the same? They're both from the ANC which is nothing more than (my guess, don't know anything under the equator). An ethnic map and political result maps are the same, half east is zulu/bantu/black and all green (votes ANC), the west half is yellow and votes Democratic alliance, as if no one cared for democratie and everyone voted for their tribe. The 3rd party is Extreme Flip Floppers, the racists. The far east is where the riots are worse. The west does have some green spots it's not homogeneous. So same story as usual. With the president a western puppet following the diversity ideology. I've heard of whites indians and muslims on one side defending their stuff (and killing), bantus on the other. Just describing it as it is not saying it's good or bad. I'm not sure if the ANC is itself divided by ethnicity and tribe or not. Another smaller party is significant in the most eastern problematic region that is the Inkatha Freedom Party I wonder if they are separatists? Jacob Zuma’s son urges South Africa rioters to ‘protest & loot responsibly’. I know a lot of these guys hate migrants and indians (and muslims) are migrants. Idi is popular once again (he kicked out the indians). Doesn't seem they hate whites that much I mean they were there before most of these guys afaik, whites were here since emm 1488 (not a joke). "evidence linking ANC branches in KwaZulu-Natal to the violent protests" www.timeslive.co.za I wasn't around back then (I didn't know about investing I mean, didn't even know it existed) but I heard people invested in some countries like for example Ivory Coast, especially sugar there, and ignored the ethnic risk and when it went boom they lost everything, don't be that guy. Maybe they use this as an excuse to disarm the population. If that happens genocide will be just around the corner. Then prob gets recycled. Half of Rwanda eco growth comes from Paul Kagame pulling a sad face when he meets a western leader, and them sending money as a result. GDP growth is something ridiculous like 10%. The Hutu breed like rabbits, so the Tutsi convinced them they were gods to rule them, the white man ruined that, now they use guilt to continue their rule GG. Maybe whites pay the price in blood then use guilt to once again rule the majority. The country would become rich again, great investment. I'm too old to be an idealist, I am a realist. The idealists are the ones with blood on their hands. Too dumb to not be in denial about it. Stupid people are worst than evil smart people since those ones refrain from pushing it too far out of fear of being stopped or punished. I don't think the russians used the word pogrom although they don't care about euphemisms, here is the source. Also Russians are taking over Africa militarly and don't believe in diversity and the west can't really do anything about it. Maybe Russia will intervene? Let a few russians get killed and ... With the collapsing west lighting candles, holding hands and singing songs as well as making diversity murals. I do not think NATO would win World War 3. The world really needs ground air missiles, all sorts of nuke countermeasures plan A plan B all the way to Z. Not having serious large scale measures and just counting on love and friendship is such terrible risk management. russianembassyza.mid.ru Of course I can't give any sort of timing. In the immediate term I hope this ends up shaking markets a bit.
by MrRenev
9
USD/ZAR UPDATED ANALYSISYou can see if we put both the DXY and USD/ZAR next to each other how well they correlate at the moment. Both charts have retraced respectively giving a strong narrative that if the DXY respects the trend and moves higher, that USD/ZAR will follow suite. The South African economy has taken a huge knock this week due to extended Covid restrictions but more importantly, the looting of major retail enterprises. Yesterday South Africa released it's Retail Sales YY* results which came in at 15.8% which, when compared to the prior results of 95.7%, is insane. If you piece all of this information together then it is reasonable to assume that the Rand will continue to weaken against the Dollar for the foreseeable future.
Long
by skypointmarkets
USDZAR 2021The USDZAR pair is currently sitting in the consolidative blue triangle. As long as the DXY remains below 92.800 and platinum stays above $1015, I expect the pair to complete an ABC corrective pattern. A break above the 200-week MA rate of 14.59 could however see the pair move into the range between 15.50 and 16.00. The fundamentals that drove the rand stronger in 2020 and the first half of 2021 are still present. SA is still holding a healthy trade surplus, the rand still has strong carry trade appeal and commodity prices remain stable. I remain doubtful that the FED will taper their minimum $120 billion in asset purchases this year despite their recent "hawkish" monetary policy stance. China's credit impulse has recently turned negative which could weigh on commodity price growth in the next two quarters but the news that China cut their reserve requirement ratio by 0.5 percentage points earlier today has me remaining bullish on commodity prices (Chinese credit expansion will support commodity demand).
by GustavFourie96
ZAR strength not necessarily overMedium-term bullish trend still seems to be intact for the USDZAR, after its recent weaknesses (strength in the US Dollar). It currently finds itself back at the 50-day Moving Average (EMA), with a break and close below R14.07, bringing back the strong support level at R13.95. This is a strong support level, with a break lower, most probably bringing back R13.50 (short-term target). Should we however see further weakness, with a break above the bullish trendline at R14.30, could see the USDZAR only find resistance again at the 200-day EMA at R14.86. For now, I still believe that the Rand is in oversold territory, which is confirmed by its 14-day RSI.
Short
by SchalkLouw
4
J200 Analysis With all the tension happening in the US stock markets it could have a severe impact on South African markets as well. This is an analysis of the JSE TOP 40. If inflation goes up enough in American markets the federal reserve could take actions to raise interest rates, meaning higher rates reduce stock valuations because why? They weaken the present value of future cash flow of companies traded. And as we all know the US market effects all markets. Disclaimer: This is not investment advice just a light warning and please invest with caution! Best of luck.
JSE:J200
by Driesman743
The Rand looks mostly overboughtThe strength in the rand is partly due to the high demand in commodities of which South Africa is a large exporter. It is also partly due to the fact that South African government bonds are offering high real yields compared to that of its peers. These factors feed the demand for the rand and thus resulting i a stronger currency. There is also the case of a potential weakening US dollar As long as the real yields on South African bonds stay relatively high and liquid, coupled by the demand in the commodity cycle, the rand is likely to remain strong against the US dollar. The signals suggest that the rand has for the most part, found a short term bottom at around R13.95. The Stochastic RSI suggests that the rand may fall back to around R13.85 before it climbs back to around R14.10. Emerging market currencies are impossible to call but I'd bet that the rand should range between R13.95 and R14.20 over the next 2 weeks or so. The irony is that the forces strengthening the rand are ignoring the South African centric risk factors. Please like and follow for daily posts on various asset classes. Please also share your views on the trading ideas and whether or not you find them to be of any value to you as a trader. Please note, this idea is shared for educational and discussion purposes only and should not result in speculative investment decisions in any asset class.
Long
by JesseMorgans
1
Time to fade the dollar move and long the South African rand Risk markets were a bloodbath this week. Explosive moves in the RV yield curve space caused ripple effects across a variety of asset classes. The US equity market was significantly affected, albeit only 2.5% from SPY ATHs. That said, there were some vicious sector rotations with momentum (TSLA,AAPL) really underperforming. EM took the brunt of this hit too, with the rand down over 4% on the 25th Feb. Today we come into a setup where the rand fell further and is now starting to rebound, in line with broad equity risk and a potential short-term top in yields. I'm entering long zar against the USD, targeting the 10day EMA at around 14.77. I will take 4/5 of the trade-off there and let the rest run.
Short
by MT-Macro