Welcome to another issue of our Weekly Rand Review.
It was another action-packed week, marked by volatility stemming from global and domestic events, on the geopolitical front, with dynamics worldwide seeming to be under a massive shift as the new US administration fast-tracked delivering on its common-sense objectives and promises but also included some additional surprises, like the closure of USAID, following the discovery of a Pandora (CSE:PNDORA)'s box of abuse, fraud and corruption in the agency let alone Trump's stated plans around Gaza!
Yes, a lot of upped tension all round, with seemingly no country or area left untouched, including South Africa!
Yet, somehow, through it all, the Rand, after a disastrous start, managed a very positive week.
Let's dive into some of the detail
Market Pulse
- {{|0Price Action (WA:ACT) (WA:): R18.03-18.32 range, as Rand managed to make solid gains
- Technical Setup: Support around R18.30 resistance around R18.80, R19.00
- Momentum: Immediate Rand down bias, but risk of reversal
- Risk Events: Trump SA executive action ramifications
- Outlook: Trump tariffs and global drivers dominate
Key Moments (3-7 Jan 2025)
Some of the more critical factors affecting price action this week:
- Trump Effect Continue: In another action-packed week, Trump's administration continued to ruffle feathers at home and abroad, including South Africa
- US Jobs Disappoint: Non-farm Payrolls fell short of expectations, but unemployment fell
- Gold Makes New Highs: Gold continued to rise pushing towards $3000
Blue Monday (Again)
Saffers - and the Rand - were woken up on Monday with the news that the US President had turned his attention to the South African government following Ramaphosa's signing of the Expropriation Bill into law stating that the land grab laws and other policies was a 'massive Human Rights VIOLATION, at a minimum' and that all US foreign aid would shut off until a full investigation was done.
The Rand 'gapped up' from Friday's close to open at R18.80/$ in early trade and continued to lose ground, touching R19.03/$ before SA trading desks had even opened but the Rand was up for the fight, as it turned things around sharply, pushing the market all the way back down to close the day over 30c better off!
Another geopolitical bombshell that sent ripples internationally on Monday was Trump's suspending USAID (US Agency for International Development) following Elon's DOGE audit discovering the agency was a lush fund for massive fraud, abuse, corruption, as well as supporting sick ideologies and funding of sinister programs and entities around the globe.
And you thought the Eskom slush-fund was bad?
The question is: Who has ACTUALLY been benefitting from all this abuse and waste of taxpayer funds?
Defo more to come on this, but in the meantime, just watch who cries the loudest!
Tuesday: Rand gains more amid fallout
Tuesday opened with the Rand under pressure again from the start, pushing higher to hit R18.84/$ before SA traders could enter the ring but once again, once they did, Rand bulls immediately managed to turn things around, pushing the market lower to close around R18.65/$ as the market continued to digest Trump's statements - and speculated about potential actions - regarding South Africa.
Of course, government officials and their media allies labeled it as 'misinformation' (surprise, surprise), whereas you only need to look at the ANC's continued commitment to the National Democratic Revolution (NDR) to see that this and other recent similar laws are an integral step in their clear socialist/communist agenda.
But then came the outcry over the cutting off of US aid, which amounted to $440 million in 2023, and how it would hurt the poor, etc But wouldn't it be interesting to let Elon's team do an audit to see where these funds actually went all these years?
Wednesday: Testing R18.50
Wednesday saw the Rand make even more gains after an initial test of R18.70/$ as the Rand continued to drive stronger against the US dollar ahead of Ramaphosa's State of the Nation address as traders pushed lower to close out the day just above R18.50/$ an impressive 50+c recovery in just 3 days!
And in other news
Trump's Frenetic Pace Continues To Ruffle Feathers
Well, it seems difficult at times to keep up to date with the pace of drastic reforms happening across the ocean in the US of A, with Trump's administration effectively taking a wrecking ball to the current status quo and left-leaning agenda.
Looking at just a few of the things happening domestically:
- A thankful return of 'common sense' being implemented, removing DEI, gender lunacy, and climate hoax policies, amongst many others
- A buyout offer to resign to all federal employees. including the CIA
- With the USAID scandal exposed and the agency shut down, Trump's plan involves using Elon's DOGE to audit other departments, such as the US Treasury, Medicare, disaster agency FEMA, the Department of Education, the FBI, and even the Pentagon expect some BIG bombshells to come out the next few weeks
And then internationally:
- After threatening 25% tariffs on Canada and Mexico, they both buckle and agree to send troops to the border to secure it, and to stop the flow of migrants and drugs in exchange for the tariffs being delayed a month amid ongoing negotiations.
- His stance on the Panama Canal being taken back due to Panama reneging on their agreement by letting China control it is still playing out.
- Then there is the proposal to make Canada a 51st state, to buy Greenland...and then another one this week, to take over the Gaza Strip and rebuild it...
Pretty radical ideas!
Are these proposals all for real, or are these outlandish proposals all part of a strategy to achieve a much less radical end result that he wanted all along?
One thing is for sure, he is not afraid to tackle long-standing problems both in the US and abroad head-on, and seems to be pulling a cabinet around him that is of the same mettle.
Some interesting time ahead!
Gold Hits $2900 - How Far Can It Go?
Gold continued to rise this past week as it made another record high, pushing above $2860 and testing above $2900 which is just what we were anticipating last month when we updated our near-term forecast for Gold (see below), where we anticipated a move into the 2860-3100 area of interest, we updated our target area last week which shows the market could have some upside still to go
Thursday: Rollercoaster Rand Roars
Getting back to the Rand the local currency had a real roller-coaster ride on Thursday, once again coming under pressure out the gate as the market pushed up to hit R18.68/$ ahead of Ramaphosa's State of the Nation address in which he addressed many of the country's problems, from the need to revitalize the economy, address load-shedding problems, rehabilitate struggling entities like Eskom and Transnet, and tackling corruption and crime (um, Cyril haven't we heard all this before?) and, of course, in a thinly-veiled response to Trump's statements, insisting that South Africa "would not be bullied".
To keep abreast of the Rand's gyrations, view our live rates chart.
Friday: Rand Stutters But Holds Firm
And then it was Friday, as the market awaited the biggie of the - Non-Farm Payrolls and markets pretty much caught in a range ahead of the announcement which showed that in January, jobs rose by a seasonally adjusted 143,000 for the month, down from 307,000 in December, and falling short of the 169,000 expected; on the flip side, the unemployment rate nudged lower to 4%.
The market vacillated almost 20c on the announcement, testing R18.32/$ before closing out around R18.40 to the US dollar - a very impressive performance!
BUT, if Saffers and the Rand thought the week of surprise was over the White House had other thoughts, issuing an Executive Order Addressing Egregious Actions of the Republic of South Africa, noting their racist policies, support of Hamas and anti-American actions, halting all foreign aid and in addition offering refugee assistance to those persecuted.
This is sure to put the cat among the pigeons!
That said, it is about time the government's real agenda was brought into the open...
Volatility & Risk Analysis
A lot more volatility this week, especially weekly:
The Average Daily Range was 24.5c or 1.3%
This equates to a potential profit or loss of R13,000 every day for every R1 million exposure
The Weekly Range (total fluctuation) from the highest (R19.03/$) to the lowest (R18.32/$) was a massive 71c or 3.8% equating to a saving or loss of R38,000 for every R1 million exposure simply by taking action at the right or wrong time.
The Week Ahead
Whew, 2025 has been one helluva ride so far, and we are only just into February.
The week will likely be much taken up with the repercussions of Trump's focus and actions last week in relation to the South African government, with the Rand under pressure this morning.
And expect some possible bombshells coming out of DOGE's audits in the US and more unexpected announcements and actions!
In essence - expect the unexpected.
Keep your head during these volatile times; this is no time to be flying by the seat of your pants!