File image: IOL
File image: IOL

WATCH: Rand trades somewhat weaker overnight

By Dhivana Rajgopaul Time of article published Jul 16, 2020

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JOHANNESBURG - The South African currency rallied on the back of vaccine hopes to shrug off higher probability of a rate cut next week as inflation slipped to the lowest level in 16 years according to NKC Research. 

Risk-on mood reigned, as optimism surrounding an experimental vaccine was boosted by promising trial results. The local unit surged to a one-month high against the greenback as safe-haven demand ebbed, while traders dismissed higher probability of another rate cut at next week’s MPC convention as inflation plunged below the lower bound of the 3 percent - 6 percent y-o-y inflation target. At the close of local trade, the rand quoted 0.65 percent stronger at R16.59/$, after trading in range of R16.59/$ - R16.75/$. The rand traded somewhat weaker overnight. Expected range today R16.45/$ - R16.90/$.

South African bourse

The JSE All Share (+0.75 percent) tracked major stock markets higher yesterday, fuelled by Covid-19 vaccine hopes. In the overall emerging market sphere, the MSCI Emerging Market Index (+0.64 percent) also reflected equity exuberance.

Brent crude oil

The Brent oil price strengthened steadily on the back of a sharp decline in US crude stockpiles. Data by the Energy Information Administration showed US crude inventories fell 7.5 million barrels last week. At the close of local trade, benchmark Brent crude futures quoted 0.56 percent higher at $43.32pb. Crude prices dipped slightly during Asian trade.

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