Compiled by Dhivana Rajgopaul
JOHANNESBURG - The rand rallied on Friday thanks to carry appeal and risk-on sentiment as the dollar index extended losses amid Jackson Hole policy guidance according to NKC Research.
The Fed unveiled significant changes to its policy goals following its 18-month-long comprehensive framework review. As anticipated, the Fed formally adopted flexible average inflation targeting, although, somewhat unexpectedly, it tweaked its employment mandate to be more asymmetric: one in which low unemployment presents less of a need to tighten policy so long as inflation remains close to the 2 percent target. This also signals that the Fed will be willing to let the economy “run hot” in order to promote broad and inclusive employment gains. We continue to forecast that the Fed will keep rates at the effective lower bound until mid-2024.
At the close of local trade, the rand quoted 1.88 percent stronger at R16.63/$, after trading in range of R16.60/$ - R17.06/$. Expected range today R16.40/$ - R16.80/$.
South African bourse
The JSE All Share (-1.43 percent) ended weaker heading into the weekend, dragged by losses across the board. In local news, Discovery (-4.35 percent) warned that its profits for the year ended June 2020 could be wiped out due to increased provision as a result of the coronavirus. In the overall EM sphere, the MSCI Emerging Market Index (+0.39 percent) rose.
Brent crude oil
The Brent oil price was stuck in a narrow band at the end of last week, as storm Laura passed through major US oil producing regions in Louisiana and Texas. At the close of local trade, benchmark Brent crude futures quoted 0.33 percent lower at $44.96pb. Crude prices advanced during Asian trade.