Central Banks do not disappoint
What has been a critical week in terms of central bank meetings, we have seen the SARB, BoJ, and BoE all meeting the expectations of the market. Earlier today, we saw the Bank of England hiking by 50bps, while the SARB followed the FOMC and raised by 75bps. The rand traded softer during the local rate announcement, with the SARB lowering expectations of the outlook on growth and inflation for next year, perhaps creating a slightly dovish tone in the build-up to the announcement. However, during the questions after the announcement, the SARB Governor did mention that two members voted for a shock 100bps hike while the remaining 3 were in favor for a 75bps hike.
JPY intervention key driver on the day
The intervention by the BoJ lead to a softer early this morning, with the BoJ drawing a line in the sand after the Yen weakened further overnight. The Yen rose close to 146 against the dollar but is trading below 142 this afternoon. The knock-on effect of this has been beneficial towards emerging markets as the rand, and its peers, trade on the front foot. We are currently up 0.7% against the dollar, aiming for a close below R17.60. The euro continues to trade at multiple-year lows, currently quoted at .9815, while the pound is flat for the day. This has seen the cross rates for these currencies slide even lower, with the rand currently trading below R17.30 against the euro and R19.85 against the pound.
#Markets #InterestRate #CentralBanks #SARB #BankofJapan #BankOfEngland
