The rand was little changed on Wednesday morning while the JSE was marginally weaker, with local focus on consumer inflation and the Reserve Bank monetary policy committee’s (MPC’s) interest-rate decision on Thursday.
Consumer price inflation slowed to 5.6% year on year, now within the Reserve Bank’s target range. However, analysts are divided on whether the Bank will pause the rate hikes on Thursday or opt for a 25-basis-point increase.
“Domestic inflation is finally reducing, especially in food and fuel, while core inflation indicates persistent pressures, hindered by a weaker rand, infrastructure issues and high electricity tariffs. In addition, lower oil prices should ease pressure on SA’s key input costs,” TreasuryOne currency strategist Andre Cilliers said.
“The Reserve Bank’s MPC is likely to raise rates by 25 bps tomorrow, and the rand remains resilient, slightly weaker due to the firmer dollar.”
At 10.28am, the rand was little changed at R17.8352/$, while it had firmed 0.16% to R20.0071/€ and 0.64% to R23.0840/£. The euro was unchanged at $1.1224.
Globally, inflation and the interest-rate outlook in the US continues to be the dominant theme ahead of next week’s federal open market committee (FOMC) July meeting.
“US retail sales came in softer than expected Tuesday, further bolstering the bias for a pause in US rate hikes following an expected hike in July,” said Botes.
At 10.25am, the JSE all share had lost 0.1% to 77,018.5 points and the top 40 was down 0.12%. SA listed property had gained 0.81%, banks 0.34% and financials 0.31%. Industrial metals had lost 1.1%, resources 0.47% and industrials 0.22%.
At the same time in Europe, France’s CAC 40 had gained 0.57% and Germany’s DAX 0.24%.
In Asia, the Shanghai Composite was little changed, while Hong Kong’s Hang Seng lost 0.44% and Japan’s Nikkei gained 1.24%.
Gold was little changed at $1,977.52/oz, while platinum lost 0.12% to $983/oz. Brent crude gained 0.49% to $80.17 a barrel.
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