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Here's the CURRENCY HUB Monthly Market Update, reflecting on last month's trading and the short-term expectations.
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Monthly Client Returns Summary (August 2023)
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Commentary From the Trading Desk
What a difference a month makes !? (I feel like I am saying this every month). The Rand has stuck to its guns being the ultimate widow maker. It ended July at 17.88 and pretty much went one way to above 19, with maybe a day or two of some hope in there. There does seem to be pretty good resistance at 19.30 but any macro shocks can impact this. Technicals go out the window with larger macro shocks.
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The premium, which is typically a passenger in the car however, still maintained a reasonably good level around the 2% range, with a few periods close to 3%.
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What is interesting to note is that the news reports on the currency are pretty much as bearish as you can get. I don’t want to sound like a stuck bull, but extreme bearishness typically signals a turnaround. Key for us is …. LOADSHEDDING. There is a clear correlation between reduced loadshedding and rand strength. As we move into summer now this should abate and the ZAR can get back to making us happy.
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It's that time of year, (Yes, ALMOST Q4 !!!) to start looking at the time left to trade this year. Given the time it takes for FIA approvals and trading R250k clips, clients are fast running out of time to complete their allocation for this year. So while it pays to be a little price-sensitive in the beginning of the year, you must not lose sight of the fact that being too cautious now, could leave money on the table. 2% continues to be a great level in historical terms and while we do feel that rand strength will bring better opportunities, 2% is still a level you should be taking advantage of.
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Credit Facility for AIT (FIA) applications
Continued challenges at SARS can be managed more efficiently by using a R2,5m credit facility to get your offshore tax clearance. Then trade with your own capital.
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Get in touch for more information or register below.
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A Few Larger News Items In Crypto & SA Macro Space To Be Aware Of:
Grayscale scored a victory in being allowed to reapply for a spot BTC ETF.
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- SEC pushed out the approval date for the various ETF manager BTC ETFs to mid October
- The negative news flow and challenges for Binance, continues to bubble under the surface (note, we have no exposure to them, nor execute with them). This could be a biggie if the fear mongers are right. I have my doubts.
- SA warning of dwindling tax revenues. Not a great soundbite that’s for sure. Perhaps we should just get everyone trading the arb. Those profits will bolster the tax coffers ! Anyone got Mr Godongwana’s number ?
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Good luck out there, stay cautious, stay opportunistic.
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