While most of the headlines will be hogged by the fact that South Africa has been greylisted, the Rand reacted more to the higher-than-expected PCE data out of the US (4.7% vs 4.2% exp). The PCE is the Fed's favorite measure of inflation, and with inflation looking like it is sticky, it has sent some fears that the Fed needs to be more aggressive and that more rate hikes than previously thought will be needed. This has caused the US dollar to break below the 1.0600 level against the Euro and is currently trading at 1.0550. This caused a bit of panic in the EM space, with the Rand, at one stage, trading around the R 18.4700 level, but the market has calmed a little, and the Rand has retreated back to R18.3800.
The stronger US dollar has also wreaked havoc on the commodity front, with Gold trading at $1810 per ounce. While the biggest losers for the day have been Platinum and Palladium, trading close to 4% lower. Platinum is currently trading at $ 913, and Palladium at $ 1381. Brent Crude is also on the slide, with a barrel trading at $ 81.21.
