Fed Chairman Jerome Powell, in his post FOMC press address yesterday, stated that there would be no hikes in interest rates until at least 2023 and that it is unlikely that they will meet their inflation target of 2% until 2023. He further stated that there would be no change in their bond-buying program for now. The big market mover was his comment that the US economic recovery has “progressed more quickly than generally expected” and this has seen the Dollar firm overnight.
The Rand traded near 16.2100 last night in a fairly volatile New York trading session before closing at 16.2281. This morning the Rand has weakened around 1.1% to be trading at 16.4050 as Dollar strength pushes all EM and risk-averse currencies weaker.
The SARB MPC meeting kicks off today with a 25 basis point rate cut possible.
Commodities are performing poorly this morning on the back of the FED and stronger Dollar. Gold is down at $1 944 while Platinum is 2.3% lower at $953 and Palladium 1.4% lower at $2 390. WTI and Brent crude are both around 1.5% weaker at $39.50 and $41.60 respectively.
The FED’s upbeat economic outlook has seen the DXY index rise to 93.492 this morning with the Dollar trading firmer at 1.1770 and the Pound at 1.2933. ECB board member Isabel Schnabel said yesterday that although the ECB does not target the Euro exchange rate, it was ready to act to curb the strength of the Euro, unsettling Euro bulls.
Wall Street, trading positive until the FOMC, ended the day in the red, and US futures are trading even lower this morning while Asian stocks are all weaker today.