The rand strengthened overnight despite US inflation and expected US interest rate hikes.
Future US inflation is predicted to break the Feds 2% target, forcing the powers that be to increase interest rates (expect 3-4 hikes in 2018) to keep this under control. If done, risky assets (such as the rand) will take a knock as investors flock to the mighty dollar to earn their “massive” interest of around 1.75%.
Moody’s rating agency sets its beady eyes on SA this Friday (time unknown) to review the countries credit risk rating (currently on negative outlook one notch above “Junk”). With the positive change in government policy, a strong budget and the fight against corruption seen since Cyril Ramaposa took over the ANC helm, a downgrade is not expected.
SA inflation figures missed the mark this morning which has seen the local unit lose some ground. Have a great day and enjoy the time off tomorrow as SA celebrate Humans rights day in remembrance of our tragic past.
All rates quoted are the interbank rates at time of publishing and shown for indicative purposes only. It is important to note that foreign exchange rates fluctuate and that the rates will vary depending on the amount and product purchased and sold.