Rand Continues To Firm Against The Greenback Despite Higher Inflation

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Despite an increase in US inflation, the local currency maintained its upper hand against the US dollar on Thursday after President Cyril Ramaphosa lifted the threshold for companies generating their electricity to 100MW, as embedded generation is considered the fastest ways to add additional megawatts onto the grid. This announcement was warmly received as the country currently grapples with continuous load shedding and capacity constraints, with the rand ending at R13.60/$, R19.27/£, and R16.55/€ at the close of local markets.

US stock markets opened flat as an increase to 5% in consumer price inflation fuelled concerns that the Federal Reserve (Fed) might have no choice but to taper loose monetary policy sooner than expected.

European markets were buoyant after the European Central Bank (ECB) upgraded its recovery forecast and vowed to maintain stimulus support for as long as necessary.

Asian stocks edged higher but remained range-bound as investors digested key economic data from the US and assessed the risk of an upside surprise that could lead to premature monetary policy tightening.

Japan’s Nikkei rose 0.34%, while the Shanghai Composite Index gained 0.54% for the day. Gold prices were subdued as the dollar struggled for direction ahead of the ECB meeting and the release of inflation figures.

Spot gold traded at $1 898.12/oz while platinum lost 1.10%, trading at $1 153.05 at 20h00.

Oil prices went up due to expectations for strong economic demand after US jobless claims declined to the lowest level in over a year.

Brent crude traded at $72.52 a barrel at the closing bell.

PSG Wealth Daily Investment Update, 11 June 2021

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  • Martin Bauwens @Martin Bauwens
    Will SARB increase the repo rate in 2021 in your opinion?
    Like 0