These are the mid rates at 6:35 today:
| USD = R18.88 | AUD = R12.65 |
| GBP = R23.71 | DXY = 103.42 |
| EUR = R20.36 | Brent Crude = $75.42 per barrel |
Sunday’s Comrades is a down run and looking at the Rand our exchange rate is also coming down, hooray!!! Like the Comrades, there is still a long way for the Rand to go, but after peaking at R19.91 to the Dollar last Thursday we managed to hit R18.81 yesterday which is an improvement of R1.10 in a week and not to be sneezed at.
A quiet week on the data front, yesterday did manage to throw up a couple of positive surprises with our Q1 2023 current account coming in much better than expected while April’s manufacturing production also impressed. Our first quarter current account was expected to be quite bad at a -R172bn deficit, so while we did deliver a deficit the actual reading of -R66bn was a much smaller shortfall than initially feared. We then got our April manufacturing report which came in at 3.4% growth, a big improvement from the -1.8% registered in March.
These data points would have helped support the Rand but most of the Rand’s strength is coming from a definite change in tone around SA hosting the BRICS summit in August. It has been confirmed that Cyril Ramaphosa is calling each head of the BRICS states, presumably for various reasons but ostensibly to engineer a move of the summit elsewhere. Tensions around SA dealing with Vladimir Putin on our shores are easing, and with it the Rand is on the up.
The following is from Business Day and suggests further gains ahead: “We are never out of the woods in this part of the world. However, I do believe the risks were being overly priced-in and the currency and bond markets were unfairly punished in terms of the magnitude of losses incurred,” said Ashley Dickinson, head of fixed income dealing at Sasfin Wealth. “We believe fair value on both bonds and the Rand have yet to be achieved in the current recovery cycle and, barring further political missteps, we should see local assets enjoy sustainable gains from their present levels.”Rand strength and Dollar weakness is a fabulous combination, the effects of which can be seen in our exchange rate yesterday afternoon.
Most of the week has seen the Dollar Index anchored just above 104 points as the dual forces of the FED skipping a rate hike next week coupled with the probability that they will hike in July leaving the Dollar unmoved. That changed yesterday as US weekly initial jobless claims jumped to a 1 ½ year high at 261 000 when 235 000 new claims were forecast, and this indication of a weaker labour force now puts a small question mark over July’s hike. The Dollar Index fell to 103.38 allowing the Rand to hit R18.81. With no market data at home or in the US today the currency market will trade on sentiment or political headlines. Hopefully we get a little more news on the BRICS summit being moved!!
Donald Trump said Thursday that he has been indicted oncharges of mishandling classified documents at his Floridaestate, igniting a federal prosecution that is arguably the mostperilous of multiple legal threats against the former presidentas he seeks to reclaim the White House.
The probability of a U.S. recession in the coming year has declined, as the risk of a disruptive debt-ceiling fight has disappeared and stress in the banking sector appears to be only a modest drag on the economy, according to Goldman Sachs Research. Our economists say there’s a 25% chance of recession in the next 12 months, down from their earlier projection of 35% shortly following the failure of Silicon Valley Bank in March.
The Group of Seven’s apparent united front against China at last month’s Hiroshima summit has given way to a new round of diplomacy with Beijing. Chinese analysts draw a bright line between, on the one hand, the United States and Japan, which are committed to containing China, and, on the other hand, the leading European countries, which are open to economic incentives. China’s number two official Li Qiang will visit Berlin and Paris later this month, attending a June 22 conference on support for poor countries (grandly titled “A new world financial pact”).
SPORTS ROUNDUP
The comrades Ultra Marathon down run {Pietermaritzburg to Durban] will be run this weekend. We wish all runners well. ‘Be aware, be careful, don’t be stupid’: Comrades doctor warns runners as race fever hits KZN.
Lionel Messi will sign with Inter Miami, opting to move to MLS this summer rather than return to Barcelona or join Cristiano Ronaldo, Karim Benzema and N’Golo Kante in Saudi Arabia, according to multiple reports. The deal will reportedly include contracts with two of MLS’s biggest commercial partners,Apple and Adidas, alongside his playing contract.
Djokovic v Alcaraz: Young upstart looking to stop Novak’s surge for Grand Slam No 23. Novak Djokovic and Carlos Alcaraz face each other in the French Open semi-finals on Friday. Incredibly, the pair only met once before. Alcaraz came away as the victor that time, also on clay.
Bok star Cheslin Kolbe confirms deal with Japanese club. There were reports that he could join the Stormers, but WP rugby confirmed that no formal offer was made to the player. “I’m so happy to confirm I will be joining Tokyo Suntory Sungoliath in the Japan Rugby League One competition after this year’s World Cup,” Kolbe said in a statement released by his management company, Roc Nation Sports International. “This is going to be a new chapter and challenge in my career, and I’d like to thank everyone who made the move possible. Suntory is a team with an impressive history, and I am looking forward to making new memories with the team over the seasons ahead. To the fans, I hope to put in some performances that you can all enjoy. See you soon!” Suntory Sungoliath also confirmed Kolbe’s signing on social media.