The recent spike in oil prices could fuel global inflationary pressures, which has bolstered the USD to a 2 week high.
Rising US bond yields and easing concerns over geopolitical risks has also positively weighed on the greenback ……..
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The rand is stable as markets wait for significant news/data to find new direction.
Risk appetite has returned, but with continuous geo-political tensions, fears over a trade war and future Fed hikes, the local unit will most likely continue to trade in its current range. In global news:
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First up is US consumer price inflation, which is expected to come in around 2.4% (ahead of the 2% target and fuelling interest rate increase fears).
The US Fed is next, where March’s meeting minutes should provide insight into how many interest rates hikes……..
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Following China’s 15% tariff on US products, ‘Merica hit back yesterday laying out plans to impose a 25% tariff on Chinese import products.
The tariff could see more than 1300 Chinese imports being effected totalling more than $50 billion. In response, China said it ………
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China’s previously announced tariff on US products came into effect yesterday with more than 120 US products being affected.
The introduction of the 15% tariff could spark fresh fears of a trade war amongst global markets. On the topic of 15%, yesterday also saw the increase of VAT and with fuel levies set to………
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Local markets shift focus to the SARB’s MPC meeting today which could confirm a possible interest rate cut.
Speculation is that Governor Lesetja Kganyago could cut the interest rate by 25bps. Following Moody’s decision………
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The rand is taking full advantage of the weaker dollar as it opens at 11.83/$ this morning.
Investors returned to buying emerging market currencies (as opposed to the USD) after Trump’s top economic advisor,
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The rand opens at 11.83/$ after emerging market currencies recovered overnight thanks to dollar weakness. The greenback weakened after Pres. Trump’s plans to impose tariffs on steel/aluminium imports took a big blow, with Democrats and Republicans being opposed to the idea (meaning the plan probably won’t become policy and a global trade war less likely)…
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US Fed chair Jerome Powell’s hawkish (very positive) testimony yesterday has sent the greenback on a mini-rally.
The dollar gained more than 1% against the majors as Powell expressed optimism that the US economy remains strong.
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By all accounts President Ramaphosa’s first address to the nation was a roaring success.
All eyes now shift to the 2018 Budget Speech set for Wednesday at 14:00. The rand’s reaction to SONA was muted, with markets waiting to see Wednesday’s balancing act. National Treasury’s focus will be on how to confront the ballooning budget deficit and government debt, amongst many other issues (with the short term goal being to avoid yet another credit rating downgrade).
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