Durable goods
Durable goods sank 4.5% in January because of a pullback in volatile passenger-plane bookings. Yet business investment rose at the fastest pace in five months in another sign of strength for the economy early in the new year. Economists polled by the Wall Street Journal had forecast a 3.6% drop in orders for durable goods. These are products like cars, planes, and computers meant to last at least three years.
The dollar is back
The question certainly is how long will the current dollar rally last? The dollar is on the front after stronger-than-expected inflation data has caused the repricing of more hikes by the Fed. In Q4 of 2022 and into Jan 2023, the market expected the Fed to have almost reached peak interest rates, but a number of good data prints came out and fuelled the dollar again. The rest of the week, we have another 4 Fed officials speaking, and we will need to watch if the hawkish tone continues.
Rand is struggling
The rand continues on the back foot, and we will need a catalyst of some sort to turn our local currency's fortunes around. All the negative news is now well priced into the rand, but if the dollar continues its run and the world runs into recession fears again, the rand will remain on the back foot. For now, the USDZAR is hovering around R18.40, and a possible test of the 2022 highs of R18.55 is possible.
