Today’s market commentary from Andre Botha, Senior Currency Dealer at TreasuryONE:
To say that the Rand had a fantastic day yesterday would be an understatement. The Rand finally broke below the R14.00 level on the back of international yield-seeking behaviour as both the US and Eurozone Central Banks kept a firm dovish stance. Both Central Banks indicated that they do not expect to hike interest rates this year in the face of challenging economic conditions.
While the Rand is on firmer footing, the problem with this sentiment play is that it can flip at any second and with the local election coming up in a months time sentiment could be very fickle. For now, at least, the sentiment is in the Rand’s favour and we could see the Rand breaking a little lower but gains could be a little bit harder to achieve.
With today being a light data day, we expect the current sentiment to hold and we could see the Rand trying to break below the R13.90 level as the market awaits events that could impart some further momentum.