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Morning Wrap

16 August 2023

Good Morning

The ZAR retraced some of its losses to open at R19.08/$ after reaching a low of R19.30/$ on Tuesday.

Market Movement Today:

  • The ZAR  recovered some of its recent losses to open at R19.07/$.
    • Traders booking profits ahead of tonight’s FOMC minutes, after banks hit easy buy stops above the level
  • Yesterday’s stronger-than-expected US retail sales data supported the case for the Federal Reserve to keep interest rates higher for longer.
    • Minneapolis Fed President Neel Kashkari also said on Tuesday that the US central bank has made some progress in its inflation fight,
    • **He added interest rates may still need to go higher to finish the job.
      • The result caused a further drop in risk assets with the SP500 dropping to 4440.  i.e. -3.6% off its recent high’s.
  • The lingering Chinese property sector as well as treasury issuances keeping yields elevated.
    • The US10YT above is 4.20% and supported by recent economic data out of the USA.
  • Technically, the uptrend in the Dollar remains and we are likely to see range trading today ahead of the minutes tonight.
  • We expect the ZAR to remain on the back foot  in the current environment.
  • Trade: BUY USDZAR on dips

Markets this morning:

  • USDZAR 19.0800
  • DOLLAR 103.06
  • EURUSD 1.0922
  • SP500 4,440
  • GOLD  1906
  • US10YT 4.18%

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