Photo: Reuters
Photo: Reuters

Rand trades on a firmer footing against the greenback

Time of article published Aug 13, 2020

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JOHANNESBURG - The rand traded on a firmer footing against the greenback despite cautious sentiment amid US-Sino trade tensions and a soft retail sales release according to NKC Research.

The dollar was hurt by the stall in fiscal stimulus talks, although an upbeat US inflation reading supported follow-through Treasury selling, building on a better-than-expected PPI release earlier this week. Headline and core inflation both rose by 0.6 percent m-o-m in July, while the y-o-y trend for headline CPI picked up to a 1.0 percent pace from 0.6 percent in June. While consumer prices are rebounding from the pandemic shock, there is still a long way to go to a full recovery. Further, inflation will not sustainably achieve the Fed’s 2 percent y-o-y target until a vaccine or therapeutic is found and virus fears have faded. At the close of local trade, the rand quoted 1.07 percent stronger at R17.36/$, after trading in range of R17.34/$ - R17.57/$. Expected range today R17.20/$ - R17.55/$.

South African bourse

The JSE All Share (+0.44 percent) ended in the black yesterday, in step with major global stock markets. Gains were pretty much scattered across the board, with the exception of gold mining (-0.60 percent) and top financial (-0.74 percent) stocks. In the overall emerging market sphere, the MSCI Emerging Market Index (+0.25 percent) traded higher.

Brent crude oil

The Brent oil price clawed back most of Tuesday’s losses after the American Petroleum Institute said that US crude stockpiles declined by four million barrels last week – beating analysts’ expectations of a 2.9-million-barrel drawdown. At the close of local trade, benchmark Brent crude futures quoted 1.28% stronger at $45.23pb. Crude prices looked stronger during Asian trade this morning.

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