These are the mid rates at 7:20 today:

USD = R17.99  AUD = R12.47
GBP = R21.70  DXY = 103.71
EUR = R19.29Brent Crude = $85.94 per barrel

Market News

  • Not a good day for the Rand yesterday as we moved above R18.00 to the Dollar for the second time this week.  We opened the day at R17.93 and traded around the mid to late R17.90’s before finally sliding to R18.09 late on.  We’ve managed to claw our way back below R18.00 this morning, but only just.   

  • If Tuesday was a day when US data could have been worse yesterday was a day when the data could not have been better, and unfortunately this was Dollar positive. 

  • Tuesday’s inflation report saw their CPI falling from 6.5% in December to 6.4% in January which was not as big an improvement as the market expected but still a drop nonetheless.  Higher than expected inflation saw the market recalibrate how many more interest rate hikes the FED might need to deliver, as well as how long they will hold rates steady, but while the Dollar Index strengthened a little it could have been way worse had inflation actually increased. The market was already questioning whether the FED has one, or two more rate hikes up their sleeve but then came yesterday’s US retail sales report which pretty much removed all doubt. 

  • After contracting for two months the market was expecting an expansion of 1.8% in January so it was a bit of a shock when 3% was announced, especially as the FED’s aggressive rate hikes are designed to cool consumer demand. 

  • Looking at recent data releases the US has added 517 000 new jobs in January, inflation barely fell to 6.4% and retail sales jumped by 3%, all confirming the strength of the US economy and its ability to withstand further rate hikes.  The FED has more work to do, the Dollar is on the up and the Rand is struggling.   

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