Welcome to this week’s market update brought to you by TreasuryONE and ETM Analytics. I
In today’s discussion, we delve into the recent pressures on the U.S. dollar, influenced by fluctuating long-term yields and ongoing tariff uncertainties set by President Trump. These factors have introduced significant volatility, reflecting directly on the dollar’s performance and the broader financial market.
Highlights:
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Dollar Under Pressure: The U.S. dollar has experienced a downturn over the past week, impacted by reduced long-term yields and erratic policy decisions regarding tariffs. These changes have stirred the financial markets, raising concerns about the stability of the dollar and potential shifts in U.S. economic policies.
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Economic Indicators and Recession Concerns: With retail sales and PMIs showing less than stellar performances, there’s growing apprehension about the U.S. economy’s direction. The Atlanta Fed has even hinted at potential negative growth as early as Q1 of 2025, signaling possible recessionary trends.
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Upcoming Fiscal Developments: This Wednesday, all eyes will be on the South African budget presentation, previously delayed and highly anticipated. The discussion will also cover the potential VAT increase and how it could impact the financial landscape.
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Long-term Economic Strategies: We discuss the necessary fiscal strategies to facilitate growth, emphasising the need for proper allocation of spending towards economic development rather than temporary relief measures.
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Currency Insights: As for the South African Rand, the trading range is expected to remain volatile, heavily influenced by international developments and domestic fiscal policies.