Rand trades steady after slipping against a stronger dollar
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JOHANNESBURG - The rand danced around the psychological R14-to-the-dollar barrier as the greenback sought direction from the CPI release, while locally markets expect the South African Reserve Bank will keep the repo rate steady next week.
In line with the consensus, our prediction is for the repo rate to be kept at 3.5 percent.
In the US, the greenback rose after the CPI release for April surprised on the upside, jumping to 0.8 percent month on month – against a consensus forecast of 0.3 percent month on month – up from 0.6 percent month on month in March.
In annual terms, the headline index surged by 4.2 percent year on year, beating expectations for a 3.6 percent year-on-year advance amid strong base effects and the energy price recovery. This marked the highest inflation reading since September 2008.
At the close of local trade, the rand was 0.05 percent weaker at R14.04 to the dollar, after trading in a range of R13.96 to R14.08. The local currency was steady this morning after slipping against a stronger dollar yesterday afternoon. The expected range of the rand against the dollar today is R14.00 to R14.30.
South African bourse
The FTSE/JSE All Share Index ended higher (+0.27 percent) on Wednesday after a slow start to the week. A solid performance in large resource stocks (+1.47 percent) helped to lift the local stock market. In the overall emerging market sphere, the MSCI Emerging Market Index traded lower (-1.04 percent).
Brent crude oil
The Brent oil price traded on the front foot yesterday following a decline in US oil inventories, while markets awaited updates on the Colonial Pipeline saga. At the close of local trade, benchmark Brent crude futures were 1.63 percent higher at $69.70 per barrel.