Photo: AP
Photo: AP

Rand trades steady overnight ahead of Sarb meeting

By Staff Reporter Time of article published Jul 23, 2020

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Compiled by Dhivana Rajgopaul

JOHANNESBURG - The South African currency retreated as traders cashed out profits and expectations for a rate cut at today’s MPC meeting intensified according to NKC Research.

While our baseline expectation is for the Sarb to opt for a cautious approach with a maintenance of the repo rate at 3.75 percent, the balance of risks is tilted towards an additional rate cut of 25 - 50 bps amid deepening demand-side pain. The consensus is for a repo rate cut of 25 bps. On US soil, the FOMC is in the midst of its blackout period surrounding next week’s meeting, so there are no Fed speakers on the calendar, and there are also no other significant events on the schedule. At the close of local trade, the rand quoted 0.24 percent weaker at R16.42/$, after trading in range of R16.35/$ - R16.52/$. The rand traded steady overnight as the Sarb prepares to meet later today. Expected range today R16.35/$ - R19.70/$.

South African bourse

The JSE All Share (-1.04 percent) ended in the red yesterday dragged by losses across the board, large technology (-2.67 percent) and industrials (-1.61 percent) stocks sustained the heaviest losses. In the overall emerging market sphere, the MSCI Emerging Market Index (-0.74 percent) traded lower.

Brent crude oil

The Brent oil price sank slightly yesterday after the Energy Information Administration said that US crude stockpiles rose unexpectedly by 4.9 million barrels during the week ended July 17. At the of local trade, benchmark Brent crude futures quoted 0.64 percent lower at $43.79pb. Crude prices traded firmer during Asian trade this morning.

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