A volatile week for the rand as it saw 13-month best levels followed by a 61cent loss of ground back up to R15’s against the dollar.

USD/ZAR News

We expected volatility on the dollar this week and we received just that.
A combination of a global sell-off, rising bond yields and US military strikes on facilities in Syria heavily influenced investor reactions to the greenback.
Selling pressure caused losses on the dollar early in the week but then optimism over a sooner than expected global recovery saw momentum tip back in the dollars favor.
US Fed Chair Powell testified for two days on the US economy and told officials that its not time to be thinking about monetary tightening – thus pushing markets to start pricing in a premature rapid recovery.
Furthermore, whenever the US takes military action, the dollar strengthens and we saw this overnight as strikes on Iran-backed militias in Syria were authorized by President Joe Biden.
These strikes were in response to attacks on US personnel in Iraq with hopes to de-escalate the situation.

Technical direction forecast
Having broken out of our long standing downward channel gives the USDZAR impetus to move to previous highs.
Next levels upward include R15.11/$ and R15.27/$, topped off at the higher end with a resistance level of R15.53/$. This climb may not occur in one foul swoop but gradually as the US military situation and global sentiment is digested into markets.

EUR/ZAR News

Early in the week President Lagarde cited that the European Central Bank has been watching the fluctuation of bond yields and thus may utilize the unused emergency funds that the EU has in reserves.
EU leaders are set to convene in a video conference summit end of this week, urgent topics to be tabled include the EU’s vaccination roll out, tightening export procedures so to ensure vaccines developed in the eurozone are supplied to bloc countries primarily.
Non-essential travel remains restricted and the emergence of new mutations of the virus needs to be addressed by EU officials.

Technical direction forecast
EURZAR played predictively in our forecasted range this week, until the huge break out was seen yesterday and thus brought us to a new higher range.
Expectations for next week can see the EURZAR possibly test R18.50/€.

GBP/ZAR News

Prime Minister Boris Johnson kicked off the week by presenting the desire of the UK government to have their next easing of restrictions be their last.
The path to this goal has been mapped out so that the state practices caution in the effort to prevent any relapses.
This effort shows that the UK economy is on it’s way to recovery and the Prime Minister wishes to not put this recovery at risk.
Despite the promising plans of action, data showed that the UK’s unemployment rate climbed to it’s highest in almost 5 years, this loss in the labor market is hoped to be reversed by mid-2021.

Technical direction forecast
Having failed to break R20.35/£, GBPZAR found itself consistently above R20.51/£ this week.
This level has now formed a support and we are likely to stay above it until it is shattered.
The top lines to look out for are R21.02/£ and R21.17/£, should these be tested and confidently broken then higher rates can be expected.

South African Rand News

We began this week with sizzling focus surrounding our local National Budget Speech from Finance Minister Tito Mboweni.
Opening on Monday at R14.77/$ on USDZAR gave the impression we may see higher levels earlier, however the opposite occurred and saw us open lower each day until yesterday.
The Budget Speech revealed several new price hikes in an effort to close SA’s revenue gap and confirmed that R9 billion will be issued for vaccine rollouts.
On Budget day the Finance Minister Tito Mboweni assured foreign investors that the country will not falter and plans are set to claw the nation out of trouble – as a result, and combined with a global sell-off, the rand saw 13 month best levels briefly on Wednesday, dropping to R14.39/$ on USDZAR.
Before we could savor these low levels, the dollar reaped the benefits of rising bond yields and safe haven status due to the military action in the Middle-East – thus we find ourselves opening at R15.02/$ this morning.