A quick summary to start the week
The rand continuing its slow grind lower again on Friday. For the better part of the session the rand traded in very tight ranges, but once local liquidity dried up the local unit continued its move stronger and we closed down at the 14.55 level. Last week alone the rand gained just over 3.0% and fairly much in line with our fellow Emerging Market peers.
This morning in the Asian session, the positive mood has remained intact with most currencies in positive territory. Stocks continued with the current gains as the vaccine rollout and slowing virus numbers prompted further bets on a global recovery. Thin market conditions as both China and Hong Kong are also closed for Lunar New Year holidays and later today the US is closed for Presidents’ Day.
This morning the rand gets underway at 14.47, its strongest level since January 2020. With some Asian markets and the US closed today, expect liquidity to remain thin and illiquid. The 14.50 is quite a big longer term support and should we manage to close below the level on Friday it could open up for a test of the 14.00 area again. The most likely scenario though is for ranges and some consolidation to prevail for the next day or so – 14.4000 to 14.7000 range trades for now.