Central Bank week providing volatility
Following the outcome of the FOMC last night, the ECB and BoE announced that they would raise rates according to the 50bps expectation. The market’s reaction is the interesting part in the fact that we see both the euro and pound trading down 0.50%. In recent weeks we have seen the dollar fall under pressure against the euro and pound, and the only logical explanation is that we are a reset after all central banks have played their cards.
Rand and EM’s holding firm
The rand continued to benefit from a risk on sentiment, breaking below R17.00 late afternoon to test the lower R16.90 levels. EM’s across the board is looking like the main benefactors from the recent shift in markets, holding firm against the dollar as it claws back against its major peers. With the euro and pound under pressure against the dollar, we have seen the EUR and GBP crosses reverse sharply on the day. The rand is currently trading at R18.55 against the euro while is just hovering above R20.85 against the pound.
#EmergingMarkets #CentralBank #InterestRate #Inflation
