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USD/ZAR News

The US Dollar has experienced some big currency swings this week due to elections. On Wednesday the exchange rate moved 60 cents as poll results shifted from Trump to Biden. The Dollar’s loss of ground may be down to investors pulling out of an uncertain Dollar positions. It appears they’d rather wait until the votes are is in and the next President is elected.

This weeks US Fed decision was delayed. Officials acknowledged that recovery is in play but remains under par, and with that interest rates remained unchanged at near zero.

Biden bias has seemingly brought stability to riskier developing-nation currencies as a win for the democrats would ensure a large stimulus package and almost eradicate trade war tension between the US and countries such as China. As results draw near and Biden closes in on 270 electoral votes, USDZAR will remain turbulent and bias toward a bearish yet oversold zone.

Technical outlook – remaining under resistance levels such as R15.99/$ has given us room to drop to lows such as R15.75/$. We expect a reaction drop if Biden wins to lows of R15.56/$, then a likely stabilisation as markets digest to above support levels such as R15.83/$.

EUR/ZAR News

Focal point in the eurozone remains the progression of the current coronavirus havoc, risk of a significant recession is increasing as cases rise and new lockdown measures are implemented.

Manufacturing data released in the week showed a strong recovery in growth for the eurozone. The PMI reading jumped 1.1% however these gains may be hindered by current restrictive measures.

Technical outlook – EURZAR has seemingly broken through the downward channel which began in August. The opportunity for more weakness in the pair seems to be running out. Lows at around R18.40/€ could present if Bidens advantage pushes the euro down but prospect of a reversal is sturdy on EURZAR – support may be seen around R18.70/€.

GBP/ZAR News

The Pound took another beating this week having lost large ground against the Rand. GBPZAR began the week at R21.07/£, peaked at R21.28/£ during a phase of Trump advantage in the elections and then proceeded to lose over 50c down to our current ranges of R20.65/£.

The UK is expected to face grim prospects of a deeper dive into a recession if their lockdown continues and restrictions worsen.

Brexit differences between the EU and UK continue to delay and keep a trade-deal on ice, further increasing the possibility of a no-deal Brexit. These factors of covid-19, a no trade-deal and uncertainty in the elections may cause further volatility on GBPZAR.

Technical outlook – for the week ahead we may see 60 cent range involving a possible further drop, followed by some retracement back up to ‘normal levels’ around R20.83/£.

The Pound is following our downward channel quite strictly on GBPZAR. If we break R20.58/£ and R20.47/£ then there is room for lower levels.

South African Rand News

The SA Rand along with several other emerging-market stocks and currencies surged to their strongest levels seen in almost a year as a Joe Biden possible win rippled through the markets.

Biden has been deemed positive for global GDP, whereas the patriotic Trump really only benefits the US, sometimes at other nations cost.

We have placed utmost importance on the US elections in terms of market moving potential, now as the results draw near the focus may shift from a winner to the legal aftermath should Biden win and Trump challenge the validity of votes.

If a Democratic President arises then investor anxiety may circle the lack of assurance that would come from a legal battle from the Trump team.

For the coming days, centre point remains around who will win the elections and then how will markets digest the unpredictability of what will follow a result.

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