Calm before the storm
The Rand stayed sideways for most of the day as the market awaits the FOMC interest rate decision later on today. The fear is that the FOMC deviates from its expected 75-basis point hike and a 100-point basis hike should see EMs under pressure and a hike of 50-basis points would see a markedly different market than we walked into this morning. We do however believe that there is a reasonable case to be made for a "buy the rumour sell the fact" where the market takes a bit of a breather and we could see the Rand rally stronger tonight. On the commodity front, it has been a quiet day much like the rest of the market as we patiently wait for the FOMC.
Euro and Pound under pressure
The US dollar traded below 0.9900 against the Euro earlier this morning. The same reaction was spotted in the Pound, however, EMs stayed fairly flat, which leads us to believe that there was a bout of Euro and Pound weakness instead of Dollar strength running through the market. This could be in anticipation of the Fed meeting later on today and it will be interesting to see the moves that these currencies do make after the FOMC.
