Morning snapshot: Rand range bound ahead of key US inflation data

Mixed denomination rand currency banknotes. Photo: Bloomberg

Mixed denomination rand currency banknotes. Photo: Bloomberg

Published Apr 9, 2024


The rand remained range bound on Tuesday morning, ahead of key US inflation data and the Federal Open Market Committee (FOMC) minutes, while the JSE All Share index remained flat.

The rand started the day trading at R18.64 against the dollar, R20.23 against the euro and R23.59 against the pound.

At 9.29am, the JSE All Share index at 9.29am was down 0.01%, at 75 328.72 points.

Bianca Botes, a director at Citadel Global, said the market dynamic remained largely unchanged, with hesitation persisting ahead of key US inflation data and the FOMC minutes, both of which would be released tomorrow.

Botes said oil prices also remained elevated as Middle East ceasefire hopes waned.

“Elevated oil prices are underscoring inflation concerns,” she said.

“Meanwhile, slightly better Chinese data, as seen over the past two weeks, is assisting commodity prices and commodity-driven currencies, like the rand. A hawkish SA Reserve Bank was also assisting the local currency to hold a solid footing as markets evaluate the global rates outlook, ” Botes said.

“It is a quiet day on the data calendar today,” she said.

Annabel Bishop, the chief economist and Investec, said in a rand note yesterday that overall, it was stronger than at the start of March, but slightly volatile as US rate cuts pushed out further.

Markets had been disappointed by the FOMC’s communications from the point of view of being supportive of rate hikes. Instead, chairperson Jerome Powell was dismissive of any short-term need for a cut, which had weakened market hopes.

The US Federal Reserve was seen to be sticking to three 25 basis points cuts this year, with inflation, seen to be “bumpy” as the start of the year, showing some firming in inflation data, adding to volatility in market expectations for rate cuts, and so, modestly for the rand, Bishop said.