CURRENCY PATROL

Heavy rains around the country with more predicted has led to a second state of disaster being declared in South Africa in under a week. Widespread flooding has wreaked havoc with more flooding predicted.

On Monday morning, the local currency declined to R18.06/$, after trading around R17.50 just a week ago. It started the year below R16.70.

At 06:45, the US dollar is trading 0.1% higher against the South African rand at R17.8715, while the euro is trading 0.2% higher at R19.1823. At 06:45, the British pound has gained 0.1% against the South African rand to trade at R21.7012.

Strong US employment data, released last week, fueled fears that the US Fed may move to cool inflation with even higher rates. Markets are now nervously awaiting the US inflation data for January, which will be released on Tuesday.

Some economists are now predicting that rates could move to six percent from the current 4.50% to 4.75%,

On Friday, credit rating Moody’s warned that “South Africa’s longest-ever stretch of power cuts is credit negative”. Moody’s currently has a stable outlook on SA, with a Ba2 rating, a notch higher than the Fitch and S&P equivalents

Bitcoin price produced a bearish divergence in the third week of January. After setting up a local top at $24,255, BTC has shed roughly 12% so far. The recent selling pressure pushed BTC to tag the 200-day Exponential Moving Average (EMA). BTC 21733.18 [USD]

• S&P Futures
  4,143.25 -4.00(-0.10%)
• Dow Futures
  34,241.00 -27.00(-0.08%)
• Nasdaq Futures
  12,525.25 -15.25(-0.12%)
• Russell 2000 Futures
  1,944.50 -2.60(-0.13%)
• Crude Oil
  79.26 -0.88(-1.10%)

US-China tension over the balloon shooting also challenge the sentiment. US Congress will take a bipartisan look at unidentified aerial objects that have made their way into U.S. and Canadian airspace, and why they were not found sooner,” said US Senate Majority Leader Chuck Schumer. It’s worth noting that a US Military General previously ruled out odds favoring the likely hand of China in the “unidentified objects” which were shot down during the weekend.