Rand News – USD/ZAR support levels tested around R15.30. In this weeks Rand News, we look at some important data released and the affect this has had on the currency market.

USD/ZAR News

From starting the week with a Biden victory to ending with a preliminary COVID-19 vaccine from Pfizer, the US held the spotlight with very little else getting fair attention in the markets. Thrilling vaccine news boosted global and emerging markets this week, returning hope to investors and subsequently pausing further Dollar weakness.

Yesterday, the US reported 709,000 people filed jobless claims last week, this is a fresh low of claims since the start of the pandemic, reflecting economic recovery. The impending legal encounters between Trump and Biden’s respective political parties are weighing on the currency and markets alike. As a result, the USD/ZAR pair has experienced miniscule price action throughout the week.

Technical direction forecast – Remaining within the downward channel. We have found a comfortable range between R15.40/$ and R15.75/$. There is a clear support structure at the R15.58/$ line which will be our base for the current sideways trend. A retracement could be on the cards back to the R15.95/$ level.

 

EUR/ZAR News

French Prime Minister reported this week that COVID-19 hospitalisations are now higher than the April peak with one out of every four deaths being linked to Coronavirus in France. Most parts of Europe are back in lockdown. President of the European Central Bank said in a speech yesterday that businesses no longer see COVID restrictions as a one-off and it is impairing decisions. This influences the economy without reservation and we have seen the currency stagger following its second wave. In uplifting news which just came in, the EU has agreed to buy up to 300 million doses of the BioNTech-Pfizer vaccine, citing there are still a number of steps which need to be followed beforehand. Deliveries are expected to start by the end of this year.

Technical direction forecast – the EUR/ZAR pair moved out of the long term channel this week to even lower than expected. The pair has shaped structure around R18.50/€. Based on the recent information about the vaccine, we could see a tick up for the Euro toward the R18.80/€ direction, keeping R18.50/€ as a base for now.

 

GBP/ZAR News

The UK’s transition out of the EU ends on 31 Dec 2020 and a new chapter begins for the UK come 1 January 2021. A multitude of opportunities lie ahead but not without its respective challenges. The Pound fell this week after the latest UK GDP data released for the third quarter. The figure rose by 15.5% but emphasized a slow down has begun in September. Investors of the Pound are concerned about a possible recession next year. Unemployment data did not move the currency even though it came in a little lower than expected.

Technical direction forecast – the GBP/ZAR has not disappointed and remains within our downward trend line. It is a slow formation but is constant since 11 August. Further lockdown restrictions could halter its progress but a firm line at R20.55/£ has formed this week. We are keeping the pair in a 60 cent range for next week. High at R20.87/£, Support at R20.54/£ and a possible best buy at R20.25/£.

 

South African Rand News

The Rand remained delicate, taking cues from other major currencies this week but to be fair, countless investors are buying up emerging market currencies after all the vaccine hope and US election uncertainty. South Africa in focus takes us to Quarter 3 unemployment data coming in at 30.8%. According to the “expanded” definition of unemployment though, the figure increased by 1.1% to 43.1% in Q3, compared to Q2.

President Cyril Ramaphosa addressed the nation on Wednesday and extended the state of disaster to 15 Dec ‘20 but relaxed many restrictions. International travel and retail alcohol sales being some of the main changes. This is a positive sign for our economy as we move into Summer and COVID-19 cases decline. The Rand remains one of the best performing emerging market currency.

Did you know you can now transfer money online ? Have you tried our free demo system?  Our registered clients also get a market report every morning to their mailbox.

click here for a free demo account