The South African unit garnered support from strong risk-on sentiment, rising in tandem with a range of emerging market currencies as the dollar retreated. Picture: Karen Sandison/African News Agency(ANA)
The South African unit garnered support from strong risk-on sentiment, rising in tandem with a range of emerging market currencies as the dollar retreated. Picture: Karen Sandison/African News Agency(ANA)

Rand trades steady overnight

By Dhivana Rajgopaul Time of article published Jan 27, 2021

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The South African unit garnered support from strong risk-on sentiment, rising in tandem with a range of emerging market currencies as the dollar retreated according to NKC Research.

The global economic calendar this week will be dominated by today’s FOMC policy meeting announcement, with markets looking toward Chairman Powell’s press conference for forward guidance.

While NKC Research expects Powell to present a more optimistic outlook, it will likely be tempered with caution regarding elevated short-term risks (as the worsening pandemic and the slow initial rollout of the vaccines is restraining activity) with an emphasis on very dovish forward guidance.

Extending the forecast horizon, inflation is expected to accelerate to a sustainable 2 percent pace and the labour market to be at full employment by 2023, thereby satisfying the conditions for rate lift-off by that time. A gradual tapering of QE asset purchases should precede this, starting in 2022.

At the close of local trade, the rand quoted 1.14 percent stronger at R15.08/$, after trading in range of R15.05/$ - R15.37/$. The rand traded steady overnight. Expected range today R14.90/$ - R15.30/$.

South African bourse

The JSE All Share (-0.99 percent) ended deep in negative territory on Tuesday as large technology (-4.94 percent) and industrial (-2.21 percent) stocks pulled the bourse lower. In the overall emerging market sphere, the MSCI Emerging Market Index (-0.83 percent) traded weaker.

Brent crude oil

The Brent oil price rose close to a 11-month peak yesterday as European stock markets climbed higher and following reports of a blast in Saudi Arabia. At the close of local trade, benchmark Brent crude futures quoted 0.86 percent firmer at $56.01pb. Crude prices remained on the front foot during Asian trade this morning.

BUSINESS REPORT

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