Rand is on a slippery slope
The Rand rode a little bit of a rollercoaster in the last 24 hours, as the Rand dipped all the way to R17.45 during Fed Chair Powell's speech but soon popped back up to R17.60. Today the Rand started off the day around R17.50 but has since lost some ground and is currently trading at R17.80. Pinpointing the exact cause of the Rand weakness has been a bit difficult as we have seen EM selling off a bit, and we have a stronger US dollar, but it is still being determined why the Rand ran to the extent it has. We also have to factor in the possible market nervousness before the State of the Nation Address tomorrow by President Ramaphosa. At the moment, the Rand looks somewhat vulnerable. It would not be a surprise if the Rand tests the R17.90 level, but with little justification for the Rand to weaken as much as shift recovery could be on the cards if the negative sentiment is unfounded. The US dollar is stronger after Fed member William's comments about the US economy and mainly focusing on the resilient nature of the economy. The US dollar is currently trading at 1.0720 against the Euro.
Commodities are a mixed bag
We have seen Gold riding a bit of a rollercoaster today, with the price dropping by $10 in the last half an hour with Fed Speaker Willams stating that demand is still strong in the US economy despite tightening monetary policy. We have seen Gold trading at $1,870 after touching a high of $1,886 in earlier trade. Brent Crude is slightly higher at $ 84.60.
#Inflation #InterestRate #EmergingMarkets #ZAR #Economy
