Today’s market commentary from Andre Botha, Senior Currency Dealer at TreasuryONE:
Despite the IMF’s lowering of the global growth for 2019, the Rand is currently on the front foot and looking push through the R14.00 handle against the US dollar. This goes against the notion that a negative view of global growth is bad for Emerging Markets. We have seen Gold trading higher on the news as there was some move to safe-haven currencies, which suggest that an EM correction is maybe lagging and the next move for the Rand could be higher.
Today we have some events and data that could support the Rand in the short term, with the US CPI, ECB interest rate decision and the minutes of the last FOMC meeting by the Fed out. Dovish comments from both the Fed and the ECB and a bad CPI print could inject short term good news for EM currencies but with global growth being the overriding story we could see EM currencies losing some ground in the medium term.