Cross Border Payments Specialists & FOREX Rates

These are the mid rates at 7:10 today:

USD = R18.13 AUD = R12.36
GBP = R23.74 DXY = 99.93
EUR = R20.36Brent Crude = $79.04 per barrel

Last week was a great one for the Rand, or more precisely a terrible week for the Dollar, this as we made it to R17.90 to the Dollar on Friday morning.  The week ahead however has a few risk events that we need to navigate with a little Rand weakness already setting in.   The greenback’s worst slump since November has a bevy of strategists and investors saying a turning point is finally at hand for the world’s primary reserve currency. If they’re right, there will be far-reaching consequences for global economies and financial markets. The US currency is teetering at the lowest level in more than a year after signs of cooling inflation bolstered bets that the Federal Reserve will soon stop hiking interest rates.

The Dollar Index suffered its biggest weekly decline since November last week thanks to US consumer and producer inflation readings coming in cooler than forecast which strengthened bets of a FED very near the top of their interest rate hiking cycle.  The FED meets next week and another 25bps rate hike on Wednesday appears a foregone conclusion with the FED Funds Futures putting a 94% chance on this move, but the market is increasingly certain that there will be no further hikes from there and the Dollar Index fell to 99.57. Federal Reserve policymakers are primed to resume raising interest rates this month and remain open to a further increase later in the year. While officials were encouraged by a step-down in price pressures last month, they’re not inclined to pronounce an end to their battle to rein in inflation that has repeatedly surprised them with its persistence. Contributing to their caution: A keen desire to avoid repeating the mistake of the 1970s, when the Fed prematurely let up on its efforts to contain inflation, only to see price increases reaccelerate to double-digit levels later.

The rand lost traction when the US Michigan sentiment came in stronger on Friday leading the dollar to regain some lost ground over the past week. What looked like 17.80 would materialise eventually petered out with the recent low pegged at 17.90.  We open the week at 18.0850.

This week sees the release of UK and SA inflation data as well as the SARB MPC on Thursday. The market is now expecting local interest rates to be left unchanged with repo at 8.25%.

As Monday dawned, Asian equity markets were met with resistance following a pause in the rally of US bonds and stocks last Friday. The halt was primarily driven by worries that the Federal Reserve may not be able to control inflation effectively. Australian equities futures barely budged while Hong Kong registered a drop of 0.7%. A similar trend was observed among Chinese stocks listed in the US which declined over 2%. Notably, Japanese markets remained closed due to a holiday. Meanwhile, contracts for S&P 500 and Nasdaq 100 saw marginal decreases as trading kicked off on Monday in Asia.

In the UK, the average price of property coming on to the market fell marginally this month, according to Right move, but the property portal says trends have proved more resilient than most expected during the first half of the year. According to the data, the average price of a residential property fell by 0.2%, or £905, this month, marginally below the 0% norm for this time of year, as increasing mortgage costs and greater buyer affordability constraints force sellers to temper their price expectations. 



Alcaraz’s ‘dream’ Wimbledon can signal changing of the guard.

Carlos Alcaraz defeated seven-time champion Novak Djokovic to claim his first Wimbledon title on Sunday, shattering the Serb’s dream of a record-equalling 24th Grand Slam crown. World number one Alcaraz recovered from dropping the first set and saving a set point in the second to win 1-6, 7-6 (8/6), 6-1, 3-6, 6-4 after four hours and 42 minutes on Centre Court. It was a second major for the 20-year-old Spaniard following his US Open title last year as he became Wimbledon’s third youngest men’s champion. An absolute treasure to watch and witness this epic battle on one of the world sports greatest stages.

Springboks vs All Blacks

Undeterred by All Black setback, Springbok coach Nienaber believes Springboks have found plenty of answers. The Springboks’ team management sent an advance party in the lead-up to last week’s Wallaby Test, won 43-12 by a largely second-string side. Several of those players started at the Mount Smart Stadium and some rustiness was evident as the All Blacks stormed into what became an insurmountable 17-0 lead in 16 minutes. The Springboks were eventually well beaten 15 – 35 by the All Blacks. ‘It felt like we were chasing ghosts,’ says Springbok Kitshoff. With the World Cup just over 2months away a further two games against the All Blacks lie ahead.