Fires of the emerging markets were once again ignited this week as sentiment over global recovery improved, this confidence brought market players back to the high-yielding risk found in the rand.

USD/ZAR News

The dollar lost ground for 4 consecutive days this week but ended yesterday firming to a 4 day high against pairs including USDZAR.
Jobless claims in the US showed an easing of job losses for the 3rd week in a row, despite this positive improvement in the American labor market the overall amount of unemployment still poses an issue during the pandemic.
Consumer spending was less over the holidays however household incomes saw a 0.6% increase, giving consumers a good kick start going into 2021.
President Joe Biden is doing his best to not break the promise of bringing forth the stimulus package of near $2 trillion.
The President said he may refine the qualification process for the checks but does not want to negotiate on giving citizens anything less than $1,400.

Technical direction forecast
We saw no more than a 23 cent range on USDZAR this past week and expect next week may have glimmers of the same tight range.
The only spanner in the works could be the SONA on Feb 11th, volatility will likely be sparked by this event.
Possible range may be spread between a high of R15.20 and a low of R14.76/$ – these ends may be tested and pushed to their limits but we will have to wait and see.

EUR/ZAR News

The eurozone economy outperformed expectations by contracting less than thought on a year to year basis, this shows hard lockdowns may not have affected the economy as badly as thought.
However, a slow vaccine rollout is affecting the euro negatively – the stalled inoculations has seen a rise infections and thus shakes investor sentiment over how soon the eurozone will see recovery.
Economic reforms, vaccinations and stimulus will surely become the talk and foundation of the euro’s performance in coming months as market players watch closely for signs of positive progress.

Technical direction forecast
EURZAR remains in a downward trend with a path set out for a low of R17.82/€ next week and possibly R17.72/€ should that low be shattered.
Staying below R18.05/€ may signal the testing of these lower levels, however staying above this line may push EURZAR to range underneath R18.35/€.

GBP/ZAR News

The UK is fairing better in their health crisis and immunities are being built in Britain whilst the nation is successfully launching the most effective vaccine campaign with over 10 million people already being given the jab.
As a result of the vaccine mission, a gradual and strong recovery is expected in coming months.
Tax breaks are coming to an end in the UK housing market and this is anticipated to put pressure on a struggling economy.
Mandatory isolation has been implemented in the UK, any person arriving from the ‘red list’ countries will have to stay in state-approved accommodation for 10 days.

Technical direction forecast
Next week on GBPZAR look out for R20.26/£, if this level is broken then several support lines rest below on the path to a R20.12/£.
It will be tough to break those levels and thus we expect a spread between R20.87/£ – R20.26/£.

South African Rand News

We started off the week with a bright spark in anxious times as the first batch of vaccines arrived from India.
Monday also brought the announcement of our lockdown restrictions easing, placing us at an amended Level 3 with Level 2 type regulations.
The rand saw consistent gradual strength this week as we stayed in a tight range but moved downward to eventually test R14.88/$ on Wednesday.
Fires of the emerging markets were once again ignited this week as sentiment over global recovery improved, this confidence brought market players back to the high-yielding risk found in the rand.
Looking ahead to next week, the focus will rest on the State of the Nation address by President Ramaphosa which will set the tone for the budget speech later in the month.
Ramaphosa will not have an easy task, with critics searching for light to be shined on issues such as poverty and grants, climate-change, the pandemic and concrete plans for the way forward.