A second wave and a second budget

JOHANNESBURG – The volatility in the rand subsided a little last week with the rand trading in a 30 cent range for most of the week.

The rand briefly broke above and below the R17.00/R17.30 range but for the most part, stayed in the range. The significant currency pair at the moment, the EURUSD, showed signs of a bit of US dollar strength as the US dollar ended the week trading below the 1.12 mark after starting the week at 1.1350.

The reason for the US dollar strength was mainly due to the significant market talking point at the moment, and that is the fear of a second wave of Covid-19. Much like the initial move we have seen safe havens like the US dollar and Gold enjoying the “risk-averse” notion of the market.

The same market phenomenons are again happening and with the market running for the hills as fears of a second fallout could have more severe repercussions for the global economy. The US initial jobless claims number, released last week, was worse than expected, which gives one the idea that the full effect of Covid-19is yet to be scoped. 

For the week ahead, there are some interesting numbers out of the US and Europe, which could impact the markets. However, data at the moment is playing second fiddle to Covid-19, and with the global impact exacerbating data sets, it isn’t easy to see the recent numbers in context.