overview

Russia takes Ukraine city by city in what seems to be a pre-planned war despite sanctions and support from the US.
The Rand, even though part of the Emerging Markets, has been steadily gaining after the Fed meeting on Wednesday due to investors attention on Gold and other commodities.

This week was an action packed one in terms of market movement on the Dollar-Rand. We started trading at R15.31/$ on Monday, in anticipation of the Fed speech we saw the market move to R15.50/$ on Wednesday and then managed to get to a low of R15.28/$ after the speech. 

This week’s market movement has proven that the war between Russia and Ukraine is now starting to bleed on the rest of the world causing global emerging market weakness.

The Dollar remains on the softer side since the Fed chair Powell announced that they will be raising interest rate hikes by 25bps despite the highly uncertain effects of what is happening in Europe at the moment.

The rand has put on quite a show for us this week, having been dominant for most of the week. Rand strength is most likely backed by Gold, which seems to be a “safe haven” for investors as of lately. In addition, as mentioned before, investors were not too happy with the Fed announcement and probably expected a 50bps hike thus resulting in the weaker dollar. US job gains has also dipped by 3.9% as well and Fed Powell has referred to the Labour Market as “tight” in his latest meeting.

Technically,
We have already broken below our expected level of R15.25/$, possibly dipping to lows of R15.15/$, we expect that the USD/ZAR pair will continue trading around the levels of R15.00/$ and R15.56/$. The pair remains in a sideways trend.

From what was called the “Ukraine and Russia” tensions has now turned out to be more of a war than anything else. With more countries sanctioning Russia and the war continuing, this has resulted in a very volatile Euro and this has now become a 21-month low for the EUR. The currency is currently much weaker than other emerging market currencies, the after effects of the current war happening is very ill-favoured for the Euro. Although Ukraine has received a lot of support from the rest of the World, the war is still heavily affecting them to a point where Citizens are now evacuating.

Technically,
EUR/ZAR has been trading in a downward channel within the ranges of R16.21/ € to R17.21/ € . We do not see the EUR gaining strength any time soon due to the War happening in Europe despite the peace talks between the two countries. We expect to see levels of R16.63/ € and R17.21/€

The UK are supporting Ukraine with full force, sanctioning more and more Russian officials and investors. UK has a new restriction where the sanctioned assets are frozen and they will be banned from travelling to the UK.
Prime Minister Boris is set on Crippling the Russian economy for as long as Putin continues to cripple Ukraine.

Technically,
There has not been much movement in the market with the Rand-pound. The GBP/ZAR pair have been trading in a downward trend and the pound seems to be a bit softer than the rand.

We could see levels of R20.38/ £ to R20.82/ £ , markets are very volatile so we are leaving our spreads wider than usual.