By the close of trade on Wednesday, the South African rand weakened against the US dollar.

  • On the coronavirus front, the market has no longer overreacted to the fluid news, as most of the cases, over 97%, as still within China’s border. Besides, more evidence so far suggests that the mortality rate is lower than SARS, even if these are still early days. The latest official stats, which must be taken with a huge pinch of salt, note 6,065 cases and 132 deaths.
  • Meanwhile, in the US, Fed held the key interest rates steady and pointed towards continued moderate economic growth and a strong job market, giving no sign of any imminent changes in borrowing costs.  The Fed Chairman, Jerome Powell, stated that current monetary policy is appropriate to support sustained economic growth, a strong labour market and inflation to symmetric 2.0%, but added that uncertainties about the outlook remained, including those posed by the new coronavirus outbreak.
  • On the data front, mortgage applications jumped last week, as mortgage rates fell to their lowest level since November.
  • Pending home sales unexpectedly dropped on a monthly basis in December, as low mortgage rates were offset by a shortage of properties for sale.
  • Further, goods trade deficit widened sharply in December.
  • The yield on benchmark government bonds fell yesterday. The yield on 2021 bond declined to 6.58% while that for the longer-dated 2026 issue fell to 8.02%.

In early trade on Thursday morning, the US dollar is trading 0.1% higher against the South African rand at R14.6385, while the euro is trading 0.2% higher at R16.1252.   The British pound has gained 0.1% against the South African rand to trade at R19.0547.

By the close of trade on Wednesday, the euro declined against most of the major currencies.

  • After protracted divorce talks, Britain will leave the club it joined in 1973 at midnight Brussels time (2300 GMT) on Friday, when British flags will be removed from EU offices and the EU flag lowered on the British premises there.  After an emotional debate during which several speakers shed tears, EU lawmakers voted 621 for and 49 against the Brexit agreement sealed between Britain and the 27 other member states last October, more than three years since Britons voted out.   With a status-quo transition period running only until year-end, fresh talks – covering everything from trade to security – will begin soon on a new relationship.
  • Meanwhile, latest readings of consumer morale in Germany, France and Italy improved, indicating overall growth in the three biggest economies of the eurozone.
  • When it comes to the Pound, it’s all about the BOE in the next 24h, in what’s arguably the most tense policy setting decision for some years. This unpredictability in today’s rate outcome is well reflected in the market pricing, which is not better than a coin flip, with a 50% chance of a cut today.

In early trade on Thursday, the euro has advanced 0.1% against the US dollar to trade at $1.1017, while it has gained 0.1% against the British pound to trade at GBP0.8463.

In other news, A disappointing fourth-quarter earnings sent Facebook shares skidding, shaving more than $5 billion off Facebook cofounder and CEO Mark Zuckberg’s net worth, which Forbes estimates is now $77 billion

Technical:

USD to ZAR Stats

Stats Data Last 30 days Last 90 days
High 14.6070 15.1069
Low 14.0020 14.0020
Average 14.3605 14.5265
Volatility 0.59% 0.53%

EUR to ZAR Stats

Stats Data Last 30 days Last 90 days
High 16.0909 16.8544
Low 15.7114 15.6814
Average 15.9551 16.1114
Volatility 0.58% 0.51%

GBP to ZAR Stats

Stats Data Last 30 days Last 90 days
High 19.0620 19.5471
Low 18.5274 18.3101
Average 18.7789 18.9132
Volatility 0.49% 0.53%

AUD to ZAR Stats

Stats Data Last 30 days Last 90 days
High 9.97145 10.4123
Low 9.74086 9.74086
Average 9.88219 9.97132
Volatility 0.53% 0.46%

CNY to ZAR Stats

Stats Data Last 30 days Last 90 days
High 2.11244 2.14687
Low 2.01078 2.00598
Average 2.07423 2.07923
Volatility 0.67% 0.55%