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Morning NOTE

4 January 2023


*Please note that our full Morning Note will resume on the 9th of January 2023. 

Summary :

  • The ZAR continues to traded stronger at the start of 2023, following a tumultuous ending to 2022.
    • In December of 2022, the local unit traded in extreme ranges(17.9500-16.8800),
      • Mostly on the back of President Ramaphosa’s impeachment vote as well as the ANC leadership conference.
      • Both decisions ended in favour of Ramaphosa and markets reacted positively to this news, resulting in more ZAR gains.
  • Supporting the local unit further were a reversal in US inflation as CPI and other inflationary metrics continued to indicate inflation might have peaked in the world’s largest economy.
    • This would also affect the way forward as it impacts the Fed’s monetary policy for 2023.
    • Fed speakers continued to be hawkish, but the data shows a slowdown has begun and we might have seen “ peak inflation”;
      • especially as Crude oil continues to trade around $80/bl.
    • Markets however remain undecided with news out of China affecting the Risk trade as the SP500  continued to trade around 3825 (below the key 4000 level) .
      • News of a Covid-19 induced slowdown likely to affect aggressive risk taking at the start of the year.
      • As well as key data this week likely to slowdown a RISK RALLY.


  • Also on the data front we have
    • 21H00 : Now all eyes turn to the Fed’s FOMC minutes on Wednesday
    • 15H30 : the nonfarm payroll report on Friday,
      • Both likely to have clues about the next move in interest rates.
  • Technically, the ZAR approaching key support at 16.8800, which will open up a move towards 16.4000.
    • Weakness above R17/$ are attractive areas for exporters to hedge and SELL USDZAR also coupling pairs like EURZAR and GBPZAR.

Opening rates
USDZAR 16.9400
EURZAR 17.9200
GBPZAR 20.3100



  • USDZAR 17.3200
  • EURZAR 18.3600
  • GBPZAR 21.0000

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