The JSE was firmer on Thursday morning, while the rand attempted to reverse some of the previous session’s losses; the currency lost more than 2% after Donald Trump’s presidential victory.
Investors are wary of Trump’s “America First” policies, which historically have led to increased trade tension and volatility in emerging markets, including SA. These concerns have sparked fears about the effect on SA’s export dynamics, potentially dampening investor sentiment and leading to reduced foreign investment and higher import costs.
Market participants are now focused on the conclusion Federal open market committee’s (FOMC) two-day meeting, expecting an interest rate cut.
Federal Reserve chair Jerome Powell’s press conference is due to take place at at 8pm local time, after the committee meeting. Powell’s statement will provide valuable insights into the Fed’s monetary policy stance, particularly after September’s interest rate cut, the first since 2020.
According to CME Group’s Fed Watch tool, there is a 100% likelihood of a rate cut, which would mark the second consecutive decrease after September’s cut.
Traders will also keep an eye on economic data, including jobless claims, before the interest rate announcement.
“Later this evening all eyes will be on the Fed where they should cut interest rates by 25 basis points. The big emphasis now will be on the Fed and their thinking around the interest rate trajectory,” said RMB head of forex execution Matete Thulare.
“With a resounding Trump win, several Fed officials will urge restraint, pushing for a more gradual rate cut approach,” Thulare said.
At 9.45am, the JSE all share had gained 0.74% to 85.960.65 points, with major indices mixed, while the top 40 added 0.73%.
At the same time in Europe, the FTSE 100 was up 0.19%, France’s CAC 40 0.22% and Germany’s DAX 1.30%.
Earlier in Asia, the Shanghai Composite rose 2.57% and Hong Kong’s Hang Seng 1.91%, while Japan’s Nikkei lost 0.25%.
At 10.28am, the rand had firmed 0.7% to R17.5039/$, 0.24% to R18.8452/€ and 0.13% to R226368/£. The euro was 0.39% firmer at $1.0768.
In the commodities markets, gold was little changed at $2,660.05/oz, while platinum lost 0.6% to $979.31/oz. Brent crude was 0.18% weaker at $74.87 a barrel.
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